J. Bradford DeLong's Blog, page 256

Noah Smith: China's Economic Growth at Risk From Reversin...

Noah Smith: China's Economic Growth at Risk From Reversing Reforms - Bloomberg: "There already are some signs that the country is making��mistakes that will hobble economic growth.... By many measures, China is the world���s largest economy. This means a number of benefits will now flow���and indeed are already flowing���to China that used to go to the U.S. and Europe. Chief among these is agglomeration.... But... it might easily make mistakes that would prevent the country from leveraging that size for maximum economic benefit. Chief among these self-inflicted wounds would be closing the country to foreign investment, extending state control of the economy and adopting an adversarial relationship with neighboring nations. Ominously, the country seems to doing all of these now, to one extent on another...

#noted #economicgrowth

I now think the right dates for the "long" 20th Century a...

I now think the right dates for the "long" 20th Century are: May 10, 1869-November 8, 2016: Frederick Studemann: The New Year Could Mark the Beginning of a New(ish) Century: "There are those, such as the economic historian Brad DeLong, who wonder whether Hobsbawn may have short-changed the 20th century. Can a case can be made, they ask, for the 20th century to run from 1870, when the wider impact of the industrial revolution became clear, political economics became central and liberal democracy took hold, to just after the global financial crisis?...

#noted #economichistory

Fairly Recently: Must- and Should-Reads, and Writings... (January 2, 2019)

Hoisted from 2008: Trade and Distribution: A Multisector Stolper-Samuelson Finger Exercise : This argument of an inconsistency between free trade and the well-being of the majority of potential voters rests substantially on the two-factor example of the Stolper-Samuelson result. It does not fare too well when we generalize to a situation in which there are a number of different factors���even if the ownership of the abundant factors of production is very concentrated indeed... #economics, #equitablegrowth, #globalization, #highlighted, #hoistedfromthearchives

William Morris said: "If you want a golden rule that will fit everything, this is it: Have nothing in your houses that you do not know to be useful or believe to be beautiful". What is the equivalent for our mental houses?: Barry Ritholtz: More Signal, Less Noise: "ere are some things you need to understand if you want to decrease the noise...

Quoctrung Bui: Map: The Most Common Job In Every State: "We used data from the Census Bureau, which has two catch-all categories: "managers not elsewhere classified" and "salespersons not elsewhere classified." Because those categories are broad and vague to the point of meaninglessness, we excluded them from our map...

Danny Blanchflower: "Hey Stephen Mooreyou need to withdraw this lie NOW: ���Pay gains in real terms this year are now estimated at 3 percent���one of the biggest increases in two decades���. Real hrly earnings rose 0.8% real weekly 0.5%...

David Weigel: "Warren's 2020 launch video is genuinely interesting because it offers Dems something they have not nominated in ages: A nominee who identifies specific sources of trouble and will fight them, instead of suggesting that a good politician can get everyone to work together...

Tren Griffin: A Dozen Things I���ve Learned from Charlie Munger (Distilled to less than 500 Words) ��� 25iq: "The intent with this post is to distill Charlie Munger���s��approach to making decisions��to less than 500 words.�� If you don���t have the patience to read 500 words, I can���t help you...

Miguel Hernan: Causal Inference Book: "Jamie Robins and I are working on a book that provides a cohesive presentation of concepts of, and methods for, causal inference. Much of this material is currently scattered across journals in several disciplines or confined to technical articles. We expect that the book will be of interest to anyone interested in causal inference, e.g., epidemiologists, statisticians, psychologists, economists, sociologists, political scientists, computer scientists��� The book is divided in 3 parts of increasing difficulty: causal inference without models, causal inference with models, and causal inference from complex longitudinal data...

Erik Bergl��f: Learning from China: "Despite 40 years of unprecedented economic growth, Chinese leaders' efforts to promote their development model have run up against political suspicion. But it makes little sense for countries to reject outright the lessons of China���s economic miracle, and deepening hostility between China and the West is in nobody���s interest...

John Geanakoplos: Leverage and Cycles

Peter Wade: Kelly Confirms He Was Lying All Along: The White House Is in Chaos: "In an exit interview, the outgoing chief of staff tries to protect his legacy...

Paul Krugman: The Trump Tax Cut: Even Worse Than You���ve Heard: "The 2017 tax cut has received pretty bad press, and rightly so. Its proponents made big promises about soaring investment and wages, and also assured everyone that it would pay for itself; none of that has happened. Yet coverage actually hasn���t been negative enough.... The reality: No money has... been brought home... the tax cut has... reduced national income... at least 90 percent of Americans will end up poorer...

Martin Wolf: The Future Might Not Belong to China: "China has had a hugely impressive four decades. After their triumph in the cold war, both the west and the cause of liberal democracy have stumbled. Should we conclude that an autocratic China is sure to become the world���s dominant power in the next few decades? My answer is: no. That is a possible future, not a certain one...

Paul Krugman is tired to trying to reason with you people...

Dani Rodrik: China���s Boldest Experiment: "China... offered a master class.... Dual-track pricing provided market incentives at the margin without undermining the fiscal revenues. TVEs spurred private entrepreneurship, despite weak frameworks for property rights and contract enforcement. SEZs spurred exports and foreign investment without undermining employment among protected state enterprises. Industrial policies allowed infant industries to internalize learning spillovers. In short, China represents the triumph of practical economics���in which second-best strategies, market failures, general equilibrium, and political economy prevail ��� over the simplistic reasoning of Econ 101...

Martin Wolf: The Future Might Not Belong to China: "China...

Martin Wolf: The Future Might Not Belong to China: "China has had a hugely impressive four decades. After their triumph in the cold war, both the west and the cause of liberal democracy have stumbled. Should we conclude that an autocratic China is sure to become the world���s dominant power in the next few decades? My answer is: no. That is a possible future, not a certain one...

...The view widely held in the 1980s that Japan would be ���number one��� turned out to be badly mistaken. In 1956, Nikita Khrushchev, then first secretary of the Communist party of the Soviet Union, told the west that ���We will bury you!��� He proved utterly wrong.... Mistakes: extrapolating... assuming... rapid economic growth will be indefinitely sustained; and exaggerating the benefits of centralised direction... [which] in the long run... is likely to become rigid and so brittle....

China���s investment rate, at 44 per cent of gross domestic product in 2017, is unsustainably high.... Not surprisingly, returns on investment have collapsed.... China has also hit the buffers on export-driven growth, at a lower level of income per head than other high-growth east Asian economies.... Future demand will depend on the emergence of a mass-consumer market, while growth of supply will require an upsurge in growth of ���total factor productivity���...

For one and a half decades, China has benefited from the reforms introduced by Zhu Rongji, premier from 1998 to 2003. No comparable reforms have happened since his time. Today, credit is still being preferentially allocated to state businesses, while state influence over large private businesses is growing. All this is likely to distort the allocation of resources and slow the rate of innovation and economic progress.... China may well fail to replicate the success of other east Asian high-growth economies... because the distortions in its economy are so large and the global environment is going to be so much more hostile....

The most interesting other economy is not Europe, which seems destined for a slow relative decline, but India... far poorer than China ... has great potential for fast catch-up growth....

The triumph of despotism is still far from inevitable. Autocracies can fail, just as democracies can thrive. China confronts huge economic challenges. Meanwhile, democracies must learn from their mistakes and focus on renewing their politics and policies...

#noted

Paul Krugman: The Trump Tax Cut: Even Worse Than You���ve...

Paul Krugman: The Trump Tax Cut: Even Worse Than You���ve Heard: "The 2017 tax cut has received pretty bad press, and rightly so. Its proponents made big promises about soaring investment and wages, and also assured everyone that it would pay for itself; none of that has happened. Yet coverage actually hasn���t been negative enough.... The reality: No money has... been brought home... the tax cut has... reduced national income... at least 90 percent of Americans will end up poorer...

...These transactions are simply rearrangements of companies��� books for tax purposes; they don���t necessarily correspond to anything real.... If you want to know whether investable funds are really being transferred to the U.S., you need to look at the overall balance on financial account... basically nothing has happened.... The tax cut did, however, have one important international effect: We���re now paying more money to foreigners.... Roughly a third of U.S. corporate profits basically flow to foreign nationals���which means that a third of the tax cut flowed abroad, rather than staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut probably made America poorer.... And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population.... Meanwhile, since the tax cut isn���t paying for itself, it will eventually have to be paid for some other way.... Even the mainly negative reporting doesn���t convey how bad a deal this whole thing is turning out to be....

#noted

Trade and Distribution: A Multisector Stolper-Samuelson Finger Exercise: Hoisted from 2008

Hoisted from 2008: Trade and Distribution: A Multisector Stolper-Samuelson Finger Exercise: This argument of an inconsistency between free trade and the well-being of the majority of potential voters rests substantially on the two-factor example of the Stolper-Samuelson result. It does not fare too well when we generalize to a situation in which there are a number of different factors���even if the ownership of the abundant factors of production is very concentrated indeed... https://delong.typepad.com/stolper-samuelson_finger_exercise-1.pdf

#globalization #equitablegrowth #hoistedfromthearchvies #economics #highlighted


https://www.bradford-delong.com/2019/01/trade-and-distribution-a-multisector-stolper-samuelson-finger-exercise.html#more

https://www.typepad.com/site/blogs/6a00e551f08003883400e551f080068834/post/6a00e551f080038834022ad384cf7d200c/edit

Comment of the Day: Howard: WTF?!?!: "the definition of "...

Comment of the Day: Howard: WTF?!?!: "the definition of "reasonable" being employed here is that a white man with a ph.d. is writing in measured tones, period...

#commentoftheday

Danny Blanchflower: "Hey Stephen Moore you need to withdr...

Danny Blanchflower: "Hey Stephen Moore you need to withdraw this lie NOW: ���Pay gains in real terms this year are now estimated at 3 percent���one of the biggest increases in two decades���. Real hrly earnings rose 0.8% real weekly 0.5%...

#noted #orangehairedbaboons #journamalism #economicsgonewrong

Quoctrung Bui: Map: The Most Common Job In Every State: "...

Quoctrung Bui: Map: The Most Common Job In Every State: "We used data from the Census Bureau, which has two catch-all categories: "managers not elsewhere classified" and "salespersons not elsewhere classified." Because those categories are broad and vague to the point of meaninglessness, we excluded them from our map:

#noted #labormarket #riseoftherobots

William Morris said: "If you want a golden rule that will...

William Morris said: "If you want a golden rule that will fit everything, this is it: Have nothing in your houses that you do not know to be useful or believe to be beautiful". What is the equivalent for our mental houses?: Barry Ritholtz: More Signal, Less Noise: "ere are some things you need to understand if you want to decrease the noise...

...More Signal, Less Noise

News is Old���it is misnamed and not especially forward looking;

Data first and foremost; avoid the anecdotes and narratives;

Everyone talks their book (i.e., Whats their agenda?)

Recognize what financial chatter��is merely idle gossip;

What is within your control? What is not?

Understand empiricism and probability analysis;

Eliminate all sources that are biased, or are not driven by your goals, or have a different agenda; (Delete money losers with Extreme Prejudice)

8.��Understand the concept of time, and the long game

Separate what is for Fun and what is for Real

10.��Refining your process is your goal. Get that right and the outcomes will improve naturally;
Your consistent focus should be to keep yourself concentrating on that which truly matters and learning to reduce or even better, ignore that which does not...

#noted #reasoning