J. Bradford DeLong's Blog, page 229
February 22, 2019
Yannay Spitzer: UC Berkeley Event: Pale in Comparison: Th...
Yannay Spitzer: UC Berkeley Event: Pale in Comparison: The Economic Ecology of the Jews as a Rural Service Minority: "Econ 211, Economic History | February��25 | 2-3:30 p.m. | 639��Evans Hall... https://yannayspitzer.files.wordpress.com/2014/11/spitzer-pale-in-comparison-150426.pdf
#noted #berkeley #economichistory
How could we tell if someone is interested in maintaining...
How could we tell if someone is interested in maintaining their own place at the top of a pyramid of status, authority, and wealth or in aiding the growth of knowledge?: Stuart Ritchie: @StuartJRitchie: "He���s quietly deleted it now, but here���s the attitude of a senior scholar to people trying to improve the quality of scientific research: Cass Sunstein: 'It is right and important to ask whether social science findings can be replicated���but in another life, the replication police would be Stasi'...
As a general rule: when you attack people not for what they have done but for what they might have done in some counterfactual world you have constructed in your mind's eye, you have lost.
#noted
Jemima Kelly: Stuff Elon Says, (Inevitable) Bitcoin Editi...
Jemima Kelly: Stuff Elon Says, (Inevitable) Bitcoin Edition: "Tesla CEO Elon Musk appeared on ARK Invest���s ���For Your Innovation��� podcast on Tuesday, to be fawned over interviewed by Ark CEO Cathie Wood and analyst Tasha Keeney.... A strange choice of podcast for him to appear on given that nobody has heard of it, perhaps? Not really. ARK Invest... is very bullish on Tesla.... Wood has said at various times that Tesla is the next Amazon, the next Apple, and that Musk is 'a one in a billion type of person'. (Implying six other Elons might be on the loose around the planet?)... Wood is also very bullish on blockchain and crypto. Very bullish.... Musk, in response to Wood, said (emphasis ours): 'Yeah. It bypasses currency controls. Yeah. **Paper money is going away, and crypto is a far better way to transfer value than pieces of paper, that���s for sure.' It was already a close correlation, but the Tesla-bro-to-crypto-bro Venn diagram is officially a perfect circle...
#noted
February 21, 2019
The very sharp Gavyn Davies summarizes four views of the ...
The very sharp Gavyn Davies summarizes four views of the macro outlook: Powell/Bernanke/Summers/DeLong. Not sure I belong in this company...
As he sees it, the Fed is now confident that there will neither be inflation which will require it to raise interest rates and trigger a recession nor private-sector weakness which ought to have led the Fed to have already returned the Federal Funds rate to zero. The first seems correct. But I am not sure why the Fed believes in tiger second���and I have no idea what the Fed thinks it can do if the second comes to pass: Gavyn Davies: Recessions and Bear Markets���The Terrible Twins: "Many global markets... are now pricing a probability of recession of at least 50 per cent within 12 months.��This recession risk seems far too high.... Inter-relationships between recessions and bear markets are complex and not very well understood. It is clear that they tend broadly to coincide in their timing.... Economists often assume that recessions are basically caused by economic fundamentals, with the financial markets reacting when these fundamentals deteriorate. Sometimes investors may be able to discern rising recession risks before they actually appear in hard economic data...
...However, in recent cycles, leverage in the financial system has generated such large gyrations in asset prices, liquidity provision and risk appetite that it has independently caused recessions in the real economy.... Claudio Borio... has argued persuasively that, since the mid 1980s, the financial cycle has operated with a much longer amplitude than the economic cycle, and that it has predicted the onset of economic recessions.... Fortunately, the current state of the financial cycle is not pointing to severe vulnerabilities in the US and other advanced economies.... The��leadership of the Fed��is optimistic that the US economy will slow this year, but that recession risks are low, because the labour market, corporate finances and financial imbalances in the private sector remain in good shape.... Ben Bernanke recently argued that economic expansions... are murdered, presumably by the central bank... tightening in monetary policy.... A more pessimistic assessment... Lawrence Summers... a recession is at least 50 per cent likely in the next year or two... a spontaneous slowdown in aggregate demand... Chinese slowdown... a failure of the US fiscal authorities to prepare infrastructure programmes in advance to stabilise demand. On this view, recent financial turbulence is correctly anticipating, not causing, a weakening economy.
A different view is that financial instability will be sufficient on its own to cause the next recession.��Brad DeLong argues that only one of the past four recessions (in 1979-82) was�����conventionally��� caused by a hostile Fed, while the other three were directly caused by instability in the financial system. While the specific trigger for the next downturn is inherently unpredictable, he thinks the culprit will be a sudden, sharp ���flight to safety��� after the revelation of a fundamental (but unexpected) weakness in financial markets. That, says DeLong, is the main factor that has been generating downturns since at least 1825....
In my opinion, the optimists probably have the weight of evidence on their side for now, especially since the Fed has revealed its true, dovish colours..
#noted
I would not have called MMT "nonsense economics". Thus I ...
I would not have called MMT "nonsense economics". Thus I think Jonathan Portes needs to put a choke collar on Prospect's headline writers. It is very much the case that MMT done right focuses attention on the inflation constraint rather than the financiers-are-scared-the-debt-is-too-high constraint, and that would seem to me to be a healthy thing. However, I do worry about multiple equilibria���and jumps between equilibria: Jonathan Portes: Nonsense Economics: The Rise of Modern Monetary Theory: "Under MMT, fiscal policy is the main tool. This may well make sense when interest rates are at or close to zero.��But that... was explicitly recognised by��government policy during and immediately after the 2008 financial��crisis.... It���s an integral part of Labour���s fiscal rule.... It��also means that MMT���at least the credible version���does not mean there��is no limit to deficits, just a different one, dictated by the��potential impact on inflation.... So in the end I... find... MMT... frustrating... [as] a mixture of the tautological, the��obvious and the tendentious.... The claim that that MMT means��that a future government can dodge hard choices about how to pay for��decent public services is just plain nonsense...
#noted
Will McGrew sends us to new EPI employee and friend of Eq...
Will McGrew sends us to new EPI employee and friend of Equitable Growth Pedro Nicolaci da Costa: The U.S. Job Market Doesn���t Feel so Hot Despite the Low Unemployment Rate: "Workers need the economy to stay hot so they can begin to see the dividends of high growth.... There are several reasons a purportedly booming U.S. economy doesn���t feel like much of a boon to millions of American workers, chief among them the startling lack of wage growth many have experienced over the past four decades.... A business- and bank-friendly mindset at the Federal Reserve, whose top officials spend a lot more time with their high-flying Wall Street and industry contacts than with workers and community leaders, deepens this imbalance.... Because of the Fed���s proximity to its business contacts, it tends to think of workers as labor costs (not investments in human capital) and wages as inflation (not improvements in standards of living). This colors the Fed���s definition of 'full employment', making policy makers easily swayed by dubious claims from business executives about chronic labor shortages���made without any contention about why wages are not rising on a sustained basis...
#noted
Fairly Recently: Must- and Should-Reads, and Writings... (February 21, 2019)
Comment of the Day: Graydon: "I am pretty sure that the theoretical case���that there's secure encryption���has been, in practical terms, backdoored out of existence at the hardware level. It is difficult to find out, one way or the other. So it's 'no one is secure' AND 'no one knows how secure they're not against which adversary' AND 'humans aren't actually generally capable of doing secure things', all together... #commentoftheday #riseoftherobots
Comment of the Day: JEC: "I think we should place more emphasis on the fact that the resolution of the Cuban Missile Crisis depended critically on the asymmetry between the American and Soviet political systems. A win-win outcome was possible only because Kennedy needed to 'win' in public, but could 'lose' in secret, while Khrushchev could tolerate a public 'loss' provided he could show CPSU insiders a secret 'win'. As a side note, I think this piece officially qualifies Niall as the 'Eugene Fama of historians', someone who's public polemic demonstrates a deep and profound ignorance of the body of knowledge created by his own discipline. Seriously, the Cuban Missile Crisis has been the subject of intense historical research since the collapse of the Soviet Union, approximately none of which supports Ferguson's 'take'... #commentoftheday #security #gametheory
*Lynn Schooler * (2005): The Last Shot: The Incredible Story of the C.S.S. Shenandoah and the True Conclusion of the American Civil War https://books.google.com/books?isbn=0060523336
Roger Miller (1965): King of The Road
Wikipedia: Xiaolongbao
Serious Eats: Gong Bao Ji Ding
Wikipedia: Lapsang Souchong
Michael O'Hare: Do Professors Care Whether College Students Are Actually Learning?: "What we need is not a cheap, lazy way to pretend we are improving our teaching, but a real quality assurance program that a Google or Toyota manager, for example, would recognize as such.... Are you a student, paying through the nose with your time and money for the best possible education?... If you don���t get good answers, recruit your classmates to go in the quad with pitchforks and torches...
Wikipedia: Queen
Bruce Schneier: There's No Good Reason to Trust Blockchain Technology | WIRED: "What blockchain does is shift some of the trust in people and institutions to trust in technology. You need to trust the cryptography, the protocols, the software, the computers and the network. And you need to trust them absolutely, because they���re often single points of failure. When that trust turns out to be misplaced, there is no recourse...
Pottery Barn: Cameron Square Arm Upholstered Sofa with Reversible Chaise Sectional
Wikipedia: Electrical Telegraph
Menzie Chinn: Industrial and Manufacturing Production Decline: Whence the Business Cycle?: "The advance and second release of GDP will be releaseed (as an ���initial��� release) on February 28. Until then, keep on guessing!...
The Mediterranean Dish: Mediterranean Pan Seared Sea Bass Recipe
The judge in the Roger Stone case appears to be doing the right thing here: Southpaw: @nycsouthpaw: "Apology not accepted. via @NatashaBertrand...
Rick Perlstein: The Jesus Landing Pad: "NSC Near East and North African Affairs director Elliott Abrams sitting down with the Apostolic Congress and massaging their theological concerns. Claiming to be 'the Christian Voice in the Nation���s Capital', the members vociferously oppose the idea of a Palestinian state.... fear an Israeli withdrawal from Gaza... object on the grounds that all of Old Testament Israel belongs to the Jews. Until Israel is intact and Solomon���s temple rebuilt, they believe, Christ won���t come back to earth. Abrams attempted to assuage their concerns by stating that 'the Gaza Strip had no significant Biblical influence such as Joseph���s tomb or Rachel���s tomb and therefore is a piece of land that can be sacrificed for the cause of peace'.... Affiliated with the United Pentecostal Church, the Apostolic Congress is part of an important and disciplined political constituency courted by recent Republican administrations. As a subset of the broader Christian Zionist movement, it has a lengthy history of opposition to any proposal that will not result in what it calls a ���one-state solution��� in Israel...
Bernard Finn: Underwater Cables: "In 1864 the India promoters laid a new flawless (but somewhat less ambitious) cable from the head of the Persian Gulf to Karachi.... Across the Atlantic... the Anglo-American Telegraph Company... complete[d] the 1865 cable, in 1866.... These first cables quickly spawned more. By 1873 they reached as far as Singapore, Hong Kong, and Sydney. The islands of the Caribbean were linked together and connected to the mainland; as were the islands of the eastern Mediterranean and those of the East Indies...
Equitable Growth's monthly charticle about the most useful monthly employment report���not the (usually) first-Friday report, but rather the JOLTS report: Kate Bahn and Raksha Kopparam: JOLTS Day Graphs: December 2018 Report Edition: "Every month the U.S. Bureau of Labor Statistics releases data on hiring, firing, and other labor market flows from the Job Openings and Labor Turnover Survey, better known as JOLTS. Today, the BLS released the latest data for December 2018. This report doesn���t get as much attention as the monthly Employment Situation Report, but it contains useful information about the state of the U.S. labor market. Below are a few key graphs using data from the report...
Continuing to make slow progress on understanding how to add information and behavior diffusion to economics: Leonardo Bursztyn, Florian Ederer, Bruno Ferman, Noam Yuchtman: Understanding Mechanisms Underlying Peer Effects: Evidence from a Field Experiment on Financial Decisions: "When someone purchases an asset, his peers may also want to purchase it, both because they learn from his choice ('social learning') and because his possession of the asset directly affects others' utility of owning the same asset ('social utility'). We randomize whether one member of a peer pair who chose to purchase an asset has that choice implemented... Then we randomize whether the second member of the pair: (1) receives no information... or (2) is informed of the first member's desire to purchase the asset and the result of the randomization.... This allows us to estimate the effects of learning plus possession, and learning alone.... Both social learning and social utility channels have statistically and economically significant effects.... Investors report updating their beliefs about asset quality after learning about their peer's revealed preference... report motivations consistent with 'keeping up with the Joneses' when learning about their peer's possession of the asset. These results can help shed light on the mechanisms underlying herding behavior...
Olivier Coibion, Yuriy Gorodnichenko, and Mauricio Ulate: Is Inflation Just Around the Corner? The Phillips Curve and Global Inflationary Pressures: "An expectations-augmented Phillips curve can account for inflation not just in the U.S. but across a range of countries, once household or firm-level inflation expectations are used.... We find that the implied slack was pushing inflation below expectations in the years after the Great Recession but the global and U.S. inflation gaps have shrunk in recent years thus suggesting tighter economic conditions. While we find no evidence that inflation is on the brink of rising, the sustained deflationary pressures following the Great Recession have abated...
For the first time ever, to my knowledge, the Congressional Black Caucus corresponds to the African-American share of the US population: Denise Oliver Velez: The Congressional Black Caucus has expanded in size and clout: "We���ve come a long way from the days when the Congressional Black Caucus (CBC) was founded 48 years ago. Back in 1971, 13 black members of Congress came together to found the organization. The CBC now has 55 members...
The invariable rule in America���except for African-Americans���is that it takes one or at most two generations for immigrants to essentially converge to white native-born outcomes as far as the labor market (but not wealth accumulation!) is concerned. It is true now: it was true for the Famine Irish: William J. Collins and Ariell Zimran: The Economic Assimilation of the Famine Irish in America: "The many John Kellys.... Negative sentiment towards immigrants is often based on fears about their ability to integrate into economic, political, and social institutions. This column analyses the impact of the influx of Irish immigrants into the US in the 19th century. It shows that the children of immigrants had assimilated in terms of labour market outcomes within one generation, providing some perspective for the current debate about immigration policy...
And another from Will McGrew, who is watching California begin trying to implement policies we at Equitable Growth had hoped to see implemented nationwide starting in 2017: Will McGrew: "Congrats to @AnnOLeary & Team Newsom_ on their bold plan for 6 months of paid leave in CA. Research by @HBoushey, @jacobselisabeth & others confirms paid leave can boost labor supply, family earnings & output, driving gov't savings from more tax revenue + less social spending...
A new book coming this fall: Heather Boushey: "On the inaugural weekend of the #womensmarch, I decided to write a book for the new economic era and made a plan. Feels really good to have sent the final manuscript in yesterday! 'Unbound' will be out in early fall...
#noted #weblogs
February 20, 2019
A new book coming this fall: Heather Boushey: "On the ina...
A new book coming this fall: Heather Boushey: "On the inaugural weekend of the #womensmarch, I decided to write a book for the new economic era and made a plan. Feels really good to have sent the final manuscript in yesterday! 'Unbound' will be out in early fall...
#noted
And another from Will McGrew, who is watching California ...
And another from Will McGrew, who is watching California begin trying to implement policies we at Equitable Growth had hoped to see implemented nationwide starting in 2017: Will McGrew: "Congrats to @AnnOLeary & Team Newsom_ on their bold plan for 6 months of paid leave in CA. Research by @HBoushey, @jacobselisabeth & others confirms paid leave can boost labor supply, family earnings & output, driving gov't savings from more tax revenue + less social spending...
#noted
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