Tyler Cowen's Blog, page 14

Voice and Exit Festival

I will be speaking at the Voice and Exit Festival in Austin, Texas, June 20-21. Voice and Exit is like a TED conference on steroids, an edgier, more radical TED. It looks like a lot of fun. Hope to see you there.

Here is a bit from V&A:

We assemble those who ask: What are the systems and ways of life that are holding us back? What can we create to make those old ways obsolete? What innovations enable us to find wellbeing, life meaning and stronger connection to others? How can we live intentionally today so as to create that better future? Voice & Exit is an environment of exploration where we “criticize by creating” a better world.

One reason why China has done as well as it has

Consider China, which has extremely rapid productivity growth, and hence very rapid nominal wage growth, despite an inflation rate that’s fairly similar to the US. Because the trend growth in nominal wages is so high in China, you’d expect downward wage inflexibility to be much less of a problem in China than in the US. I frequently argue that NGDP growth is often the best proxy for the welfare costs and benefits of inflation, better than inflation itself. This is one more such example, as NGDP growth is strongly correlated with productivity growth plus inflation.

That is from Scott Sumner, the rest of the post is interesting too,mostly about stickiness.  That is one reason why the Chinese (but not everyone) can “wait out” recessionary pressures with fiscal policy.  By the time the fiscal policy runs out, the underlying rate of productivity growth has helped solve the wage stickiness problem, and time has validated the demands of at least some of those stubborn workers.

Is happiness inequality up or down?

Steven Quartz writes:

…our current Gilded Age has been greeted with relative complacency. Despite soaring inequality, worsened by the Great Recession, and recent grumbling about the 1 percent, Americans remain fairly happy. All of the wage gains since the downturn ended in 2009 have essentially gone to the top 1 percent, yet the proportion of Americans who say they are “thriving” has actually increased. So-called happiness inequality — the proportion of Americans who are either especially miserable or especially joyful — hit a 40-year low in 2010 by some measures. Men have historically been less happy than women, but that gap has disappeared. Whites have historically been happier than nonwhites, but that gap has narrowed, too.

In fact, American happiness has not only stayed steady, but converged, since wages began stagnating in the mid-1970s. This is puzzling. It does not conform with economic theories that compare happiness to envy, and emphasize the impact of relative income for happiness — how we compare with the Joneses.

Here is part of the answer, consistent with what I argued in my book What Price Fame?:

…social status, which was once hierarchical and zero-sum, has become more fragmented, pluralistic and subjective. The relationship between relative income and relative status, which used to be straightforward, has gotten much more complex.

…A new generation of ethnographers has discovered an explosion of consumer lifestyles and product diversification in recent decades. From evangelical Christian Harley-Davidson owners, who huddle together around a motorcycle’s radio listening to a service on Sunday mornings, to lifestyles organized around musical tastes, from the solidarity of punk rockers to yoga gatherings, from meditation retreats to book clubs, we use products to create and experience community. These communities often represent a consumer micro-culture, a “brand community,” or tribe, with its own values and norms about status.

The article is very interesting throughout, hat tip goes to Claire Morgan.

Note that the closing bit of this piece is…this: “Money may not buy happiness in the long run, but consumer choice has gone a long way in keeping most Americans reasonably content, even if they shouldn’t be.”

Sunday assorted links

1. How to grow your own furniture.

2. Paul Krugman on Apple Watch.

3. The growing influence of Raj Chetty.

4. Photographing all 947 towns in Iowa.

5. Profile of David Brooks and his new, forthcoming book.  Profile of Charles Lloyd.

6. Hidden agendas in Yemen, a good piece by Graham Fuller, recommended.

Barbara Bergmann has passed away at age 87

Barbara Bergmann, a pioneer in the study of gender in the economy who herself overcame barriers to women in the world of academic economics, died on April 5 at her home in Bethesda, Md. She was 87.

…Ms. Bergmann was an emeritus professor at both American University and the University of Maryland, and she continued to research, publish and consult until very recently.

The rest of the NYT obituary is here.  When Bergmann went to Harvard for her doctorate in the 1950s, women took exams separately from men.  She feared that automation would decimate the jobs held by women (it seems the opposite has been true, but kudos to her for considering the issue), and she once wrote this:

“Will high-status people be willing to type their own documents in the future?” she asked. “Though the stigma runs deep, the spreading use of the computer for tasks other than word processing may succeed in removing the stain from the activity of typing on the job.”

Here is a 2014 segment on why Bergmann did not favor a guaranteed annual income.  Here is Bergmann on scholar.google.com.  Here is her Wikipedia entry, she also was an early proponent of computer-simulated economies.

Where do pickpockets strike?

Kevin Beirne reports from an FT chat with James Freedman and tells us:

I ask if there are certain hotspots where pickpockets strike. Tourist spots, Freedman tells me, especially places such as Big Ben and the Eiffel Tower, where people’s attention is directed upwards and away from their belongings. He says that many pickpockets also operate near signs warning us to beware of pickpockets. The irony is that when people read the signs, they check their pockets or bag, thus alerting the lurking pickpocket to where their valuables are.

File under “Law of Unintended Consequences.”  And if you can get through the gate, the piece is interesting more generally.

Larry Kramer’s *The American People*

This sprawling comic novel cum history is likely to go down as one of the books of the year.  I thought Lawrence D. Mass’s review was excellent, here is one excerpt:

Conversely, is The American People the War and Peace or Gone With The Wind of LGBT history? The American People is so many disparate things that comparisons will inevitably fall short. It’s a Swiftian journey through an America we never knew; a Voltairean satire of American life and ways; a literary offspring of Gore Vidal’s Lincoln and Myra Brenckenridge; a pornographic American history through the eyes of a Henry Miller; a Robin Cook medical mystery. It’s a Sinclairean expose of American industrial and corporate skulduggery, and otherwise breathtakingly testimonial to the art of muckraking. It’s a treasure trove of historical findings, especially of the history of sex in America — of prostitution, communal living, of STD ‘s, of medicine and infectious diseases, of sanitation and health care, of medical and historical institutions, research, opinion, publications, figureheads and testimony. It’s an ultimate coming together (pun intended) of the personal with the political. And it’s the grandest telling yet of Kramer’s own story.

But as you can see from the above description, a significant chunk of readers will reject the book’s premise, language, and topics altogether.  I think it is very, very good, you can order it here.

China fact of the day

“There are individual US pilots that have had more carrier landings than the whole of the Chinese military,” says Mr Midgley. Gary Li, an independent defence analyst on Beijing, adds that having an aircraft carrier “does not equate to knowing how to use it. They are years away from being able to conduct carrier operations.”

I am not sure however that this is true:

The army will eventually have to get rid of troupes of dancers, opera singers and drivers who are more representative of a former era when ideological concerns were more pressing.

The FT article is interesting throughout.

Saturday assorted links

1. What predicts relationship success?

2. What is it like to use a 1997 tourist guide to visit NYC?

3. New Michael Clemens paper on failed replications.

4. What to do about those p values?  (Humorous too)

5. Are disability standards too lax?

6. John McGinnis on compensating differentials and income inequality.

How much is that birdie in my backyard?

In a recently published article, Clucas, Rabotyagov, and Marzluff report:

Human-wildlife interactions in urban areas, both positive and negative, often involve people and birds. We assess the economic value placed on interactions with common native songbirds in two different urban areas (Berlin, Germany and Seattle, Washington, USA) by combining a revealed preference (recalled expenditures on bird feed) and a stated preference approach (determining willingness to pay for conservation or reduction of birds). Residents in both cities purchase bird food, engage in a range of bird-supporting activities and are generally willing to pay a small amount for native songbird conservation. Demographic, cultural and socio-economic factors, as well as specific attitudes towards birds and general attitudes about conservation were found to influence these decisions. This study presents the first attempt at estimating the economic value of enjoying common native urban songbirds and estimates the lower bound to be about 120 million USD/year in Seattle and 70 million USD/year in Berlin.

There is some media coverage here, and for the pointer I thank Charles Klingman.