J. Bradford DeLong's Blog, page 216

Fairly Recently: Must- and Should-Reads, and Writings... (March 13, 2019)

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Modern Economic Growth: Eagle's-Eye View Slides
Future Duration of Modern Economic Growth
Readings: Modern Economic Growth

Bill Nordhaus: The History of Lighting
Dave Donaldson: Railways of the Raj
Peter Thompson: Liberty Shipbuilders
Nick Crafts: The Solow Productivity Paradox
Nathan Nunn: The Long-Term Effects of Africa��s Slave Trades

African Retardation

Nathan Nunn: The Long-Term Effects of Africa��s Slave Trades

Modern Economic Growth Memo Question

Comment of the Day: Phil Koop: Larry Kudlow (December 7, 2007): Bush Boom Continues: "Don't sell Kudlow short! He's also a terrible now- and back-caster...

Marne Levine: How Did I Get Here?

Sean Illing: "Fascism: a Warning" from Madeleine Albright

Neil Cummins: The Missing English Middle Class: Evidence From 60 Million Death And Probate Records: "Despite the great equalisation of wealth over the 20th century, most English have no significant wealth at death...

David H. Autor: Work of the Past, Work of the Future: "A disproportionate polarization... shunting non-college workers out of specialized middle-skill occupations into low-wage occupations... diminishing the set of non-college workers that hold middle-skill jobs in high-wage cities... attenuating... the steep urban wage premium for non-college workers...

Paul Krugman (2015): On Econoheroes: "Look at hits on Google News. If you put in ��mankiw economy�� you get about 5200 hits, many of them involving debates at the recent economics meetings. If you put in ��stephen moore economy�� you get 65,700 hits. If you put in ��stiglitz economy�� you get 43,800. I see this as a real asymmetry...

Sanjiv Das, Kris Mitchener, and Angela Vossmeyer: Bank Networks and Systemic Risk in the Great Depression: "The Global Crisis brought attention to how connections among financial institutions may make systems more prone to crises. Turning to a major financial crisis from the past, this column uses data from the Great Depression to study risk in the commercial banking network leading up to the crisis and how the network structure influenced the outcomes. It demonstrates that when the distribution of risk is more concentrated at the top of the system, as it was in 1929, fragility and the propensity for risk to spread increases...

Alicia Sasser Modestino: Is the "Skills Gap" ReaL?: "Since the Great Recession, employers have cited a skills gap in which workers lack the education and experience needed to fill vacant jobs. While job requirements increased for many openings during the recession, the inverse has happened as the labor market has recovered...

Lee Harris: Murderbot Will Return in�� "Network Effect". A Full Novel by Martha Wells

Matthew Yglesias: Great Tariff Debate of 1888: Trump��s Love of the McKinley Tariff: "Trump��s side won, and it was an unpopular disaster...

Karl Smith: [Why Centrists Have to Become More Partisan(https://www.bloomberg.com/opinion/art...): "In America��s polarized political climate, credibility within the party is a prerequisite for getting anything done...

James Fallows: ET302: Is the Boeing 737 Max 8 to Blame?: "No one knows for sure��but here is where experts will be looking for clues...

Herman Melville: Moby-Dick: "Ahab: 'Aye, aye! and I��ll chase him round Good Hope, and round the Horn, and round the Norway Maelstrom, and round perdition��s flames before I give him up. And this is what ye have shipped for, men! to chase that white whale on both sides of land, and over all sides of earth, till he spouts black blood and rolls fin out. What say ye, men, will ye splice hands on it, now? I think ye do look brave'...

Ernst Renan: What Is a Nation?: "The essence of a nation is that all of its individual members have a great deal in common and also that they have forgotten many things. No French citizen knows whether he is a Burgund, an Alain, a Taifala, or a Visigoth. Every French citizen has forgotten St. Bartholomew��s Day and the thirteenth-century massacres in the Midi...

Wikipedia: Cauchy Distribution

Anna Mikusheva: Weak Instrumental Variables

Max Roser and Esteban Ortiz-Ospina: Global Extreme Poverty

Isaiah Andrews and James H. Stock: Weak Instruments and What to Do About Them

Philip Auerswald: The Code Economy: A 40000-Year History

Absolute lunacy from a politician who is the essence of a twit: Nigel Farage: The Betrayal of Brexit Is One of the Most Shameful Chapters in Our Country��s History: "498 MPs voted to trigger Article 50.... They all knew that the consequence was that the UK would leave the EU on March 29 2019, with or without a deal. And yet now they have decided to claim the vote was meaningless.... We are living through one of the most shameful chapters in our country��s history...

Andr��s Velasco: The Challenge of Monetary Independence: "By shadowing the US Federal Reserve so closely, Latin American countries are foregoing the policy flexibility that their floating exchange-rate regimes are intended to allow. They also risk relying too heavily on possible US interest-rate cuts to boost their economies, and not enough on deeper, long-term reforms...

Tim Ross, Robert Hutton, and Ian Wishart: This Is the New Brexit Deal Theresa May Got From the EU: "Juncker says it��s this deal or U.K. might never leave EU. May, Juncker agree new legal texts on Irish border backstop.... Three new documents... includ[ing] a 'unilateral declaration' setting out how the U.K. believes it can escape the backstop....Wording in a legally binding joint statement goes as far as the EU says is possible in reiterating that the backstop��an insurance policy that effectively keeps the U.K. in a customs union with the EU��is only meant to be temporary. And it gives the U.K. some authority to walk away if the EU doesn��t do enough to replace it with a full trade deal.... The independent arbitration panel (comprising senior judges) could rule that the EU is acting in such a way as to make the backstop last indefinitely.... 'Persistent failure' to comply with a ruling 'may result in temporary remedies'. This doesn��t go as far as meeting the demands of Attorney General Geoffrey Cox....But the joint document does go on to say that the U.K. (or EU, for that matter) would 'ultimately' have the right 'to enact a unilateral, proportionate suspension of its obligations under the Withdrawal Agreement' including the backstop.... The U.K. also published a separate document, 'interpreting' the joint statement in its own wording but with the tacit consent of the EU...

Alberto Nardelli: The EU Is Telling European Leaders There Are Only Three Reasons They Should Allow Brexit To Be Delayed: "The European Union will advise EU leaders that delaying Brexit makes sense only... to give more time to prepare for no deal, to complete ratification of the withdrawal agreement or if the UK decides to hold an election or a referendum. The assessment is contained in an internal memo... which sets out the thinking at the highest level of the European Commission following Theresa May��s heavy defeat on her revised Brexit deal in parliament.... Ultimately, it will be a political decision for the EU��s 27 leaders...

Please let me be your neighbor Wigner's friend. It's Everett's many-worlds universe, and we just live in it: Massimiliano Proietti, Alexander Pickston, Francesco Graffitti, Peter Barrow, Dmytro Kundys, Cyril Branciard, Martin Ringbauer, and Alessandro Fedrizzi: Experimental Rejection of Observer-Independence in the Quantum World: "The scientific method relies on facts, established through repeated measurements and agreed upon universally, independently of who observed them. In quantum mechanics, the objectivity of observa- tions is not so clear, most dramatically exposed in Eugene Wigner��s eponymous thought experiment where two observers can experience fundamentally different realities. While observer-independence has long remained inaccessible to empirical investigation, recent no-go-theorems construct an ex- tended Wigner��s friend scenario with four entangled observers that allows us to put it to the test. In a state-of-the-art 6-photon experiment, we here realise this extended Wigner��s friend scenario, exper- imentally violating the associated Bell-type inequality by 5 standard deviations. This result lends considerable strength to interpretations of quantum theory already set in an observer-dependent framework and demands for revision of those which are not...

The ERM system of a generation ago was in one important respect vastly superior to the Euro mechanism. THE ERM system had a fiscal backstop that the Euro mechanism lacked, and Europe today is much the poorer for it: Giancarlo Corsetti, Barry Eichengreen, and Galina Hale: The Euro Crisis in the Mirror of the EMS: How Tying Odysseus to the Mast Avoided the Sirens but Led Him to Charybdis: "What explains the longer and deeper downturn after 2009?.... Six lessons of the ERM-euro crisis comparison...

And here is the launch explanation of the analytical perspective that the brand-new group Economists for Inclusive Prosperity hopes to take. It is good. Perhaps we at Equitable Growth should steal it?: Suresh Naidu, Dani Rodrik, and Gabriel Zucman: Economics After Neoliberalism: "Economists of the real world... understand that we live in a second-best world rife with market imperfections and in which power matters enormously.... The competitive model is rarely the right benchmark.... This requires an empirical orientation, an experimental mind set, and a good dose of humility to recognize the limits of our knowledge.... Throughout [our] proposals is the sense that economies are operating well inside the justice-efficiency frontier, and that there are numerous policy 'free-lunches' that could push us towards an economy that is morally better without sacrificing (and indeed possibly enhancing) prosperity...

Hilary Hoynes and Jesse Rothstein: Universal Basic Income in the US and Advanced Countries: "Advanced economies... [have] well developed, if often incomplete, safety nets... a framework... compare various UBIs to the existing constellation of programs...

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Published on March 13, 2019 19:42

Hilary Hoynes and Jesse Rothstein: Universal Basic Income...

Hilary Hoynes and Jesse Rothstein: Universal Basic Income in the US and Advanced Countries: "Advanced economies... [have] well developed, if often incomplete, safety nets... a framework... compare various UBIs to the existing constellation of programs...

...UBI would direct much larger shares of transfers to childless, non-elderly, non-disabled households than existing programs, and much more to middle-income rather than poor households. A UBI large enough to increase transfers to low-income families would be enormously expensive. We review the labor supply literature for evidence on the likely impacts of a UBI. We argue that the ongoing UBI pilot studies will do little to resolve the major outstanding questions...

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Published on March 13, 2019 19:21

And here is the launch explanation of the analytical pers...

And here is the launch explanation of the analytical perspective that the brand-new group Economists for Inclusive Prosperity hopes to take. It is good. Perhaps we at Equitable Growth should steal it?: Suresh Naidu, Dani Rodrik, and Gabriel Zucman: Economics After Neoliberalism: "Economists of the real world... understand that we live in a second-best world rife with market imperfections and in which power matters enormously.... The competitive model is rarely the right benchmark.... This requires an empirical orientation, an experimental mind set, and a good dose of humility to recognize the limits of our knowledge.... Throughout [our] proposals is the sense that economies are operating well inside the justice-efficiency frontier, and that there are numerous policy 'free-lunches' that could push us towards an economy that is morally better without sacrificing (and indeed possibly enhancing) prosperity...

...Many of the essays share the theme of how power asymmetries shape our contemporary economy.... Who has the upper hand in bargaining for wages and employment; who has market power and who gets to compete; who can move across borders and who is stuck at home; who can evade taxation and who cannot; who gets to set the agenda of trade agreements and who is excluded; who can vote and who is effectively disenfranchised. Some of these asymmetries are traditional political imbalances; others are power imbalances that naturally occur in the market due to informational asymmetries or barriers to entry. Policies that counter such asymmetries make sense not only from a distributional standpoint but also for improving aggregate economic performance. The policy essays tackle these asymmetries frontally��and suggest ways of rebalancing power for economic ends....

These essays (with more promised) are intended as first cuts, rather than definitive statements: we offer them as evidence that economics produces relevant and imaginative policy ideas and an encouragement to other economists to contribute in the same vein. They are a proof-of-concept for the claim that economics can help build a society that is both fairer and does more to live up to its productive potential��that economics can serve inclusive prosperity...

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Published on March 13, 2019 19:20

The ERM system of a generation ago was in one important r...

The ERM system of a generation ago was in one important respect vastly superior to the Euro mechanism. THE ERM system had a fiscal backstop that the Euro mechanism lacked, and Europe today is much the poorer for it: Giancarlo Corsetti, Barry Eichengreen, and Galina Hale: The Euro Crisis in the Mirror of the EMS: How Tying Odysseus to the Mast Avoided the Sirens but Led Him to Charybdis: "What explains the longer and deeper downturn after 2009?.... Six lessons of the ERM-euro crisis comparison...

....The negative feedback between bank balance sheets and sovereign balance sheets was critical starting in 2009-10.... The required relative price adjustment was greater in 2010 because the current account reversal was larger..... Relative price adjustment... was more difficult to achieve in 2010. Individual euro-area countries no longer had their own exchange rate.... Government debts and deficits were lower in 1992-3, leaving more room for supportive fiscal policy.... To the extent that domestic cost and price reductions lagged in 2009-10, the required compression of current account deficits could only occur through reductions in imports, brought about by public spending cuts by governments and deleveraging by households.... Central banks of countries experiencing these problems in 1992-3 could cut interest rates to support domestic demand and prevent balance-sheet problems from spiraling out of control.... In 2009-10, in contrast, policy rates were set by the ECB in light of euro-area-wide conditions.... The same policy rate translated into very different borrowing costs for firms and governments of different countries as their credit worthiness diverged.... Managing large shocks requires a credible backstop for banks and sovereign debt markets. This backstop is required to prevent the endogenous amplification of shocks. A backstop was available during the ERM crisis but not the euro crisis. The goal of euro-area reform now should be to provide one...

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Published on March 13, 2019 19:18

Modern Economic Growth Memo Question

Economics tends to view growth as a continuous and diffuse process: if one firm does not solve the problem of how to efficiently utilize resources, others will and drive the first out of business; if one technological vein plays itself out, energy will focus on others. These readings all argue different. They argue one side of a debate. They argue either that some unique and particular institutions and technologies matter a lot. What kinds of evidence not presented in these readings might lead you to come down on one or the other of the many, many sides in this debate��either on the side of economists' standard prior, or that in fact it is still other and still different institutions or technologies or simply the aggregate state of the economy that matters the most?

#teachingeconomics #teachinggrowth #teachinghistory #moderneconomicgrowth #berkeley

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Published on March 13, 2019 18:09