Tyler Cowen's Blog, page 224
February 22, 2014
My review of Diane Coyle and Zachary Karabell
That is published in The Washington Post, and I can recommend both books. Coyle’s book is GDP: A Brief But Affectionate History and Karabell’s is The Leading Indicators: A Short History of the Numbers That Rule Our World. My opening sentences are this:
‘May my children grow up in a world where no one knows who the central banker is” is a wise saying. One also can hope for a world where arguments about measuring GDP (gross domestic product, the sum total of the goods and services produced within a nation) or the inflation rate are rare. In good economic times, we tend to take reported economic numbers for granted, but more recently, conspiracy theories have run wild.
On Coyle:
If you are going to read only one book on GDP, Diane Coyle’s “GDP: A Brief but Affectionate History” should be it. More important, you should read a book on GDP, as many of the political debates of our time revolve around this concept. Can we afford our current path of entitlement spending? Was the Obama fiscal stimulus worth it? When will China overtake the United States as the world’s largest economy?
The answers all depend on GDP. In 140 pages of snappy text, Coyle lays out what GDP numbers measure, what roles they play in economic policymaking and forecasting, and how GDP numbers can sometimes mislead us, albeit not in the way many current critics suggest.
With Karabell I have a quibble:
I do not agree with Karabell’s claim that “Bhutan is now routinely described as one of the happiest nations in the world.” The prime minister of Bhutan, Tshering Tobgay, has moved away from talk of “Gross National Happiness,” perhaps because he has realized that his country has relatively little of it. Most of the population is engaged in subsistence farming and has only a minimal chance of performing rewarding or creative labor. The prime minister instead wishes to focus on concrete goals such as “a motorized rototiller for every village and a utility vehicle for each district.” For all the talk of being content with less, external debt has soared to 90 percent of GDP. If anything, Bhutan may show that measures of GDP get at happiness more clearly than does focusing on happiness more directly. Just look at where immigrants wish to move — it is almost always wealthier countries.
Read the whole thing.
Manhattan markets in everything
How much would you pay to poop in private? A new company called Posh is betting the answer is six dollars, alongside a $15-a-year membership fee. Taking a Zipcar-style approach to bathrooms in Manhattan, the service will offer private powder rooms with baby-changing stations and luxury showers in a central Manhattan location. The service also offers lockers where visitors can store their bags, but the core appeal is the bathroom, a crucial respite for small-bladdered tourists without access to other facilities. According to the site, the rooms will be cleaned after each usage, and equipped with touchless faucets and flushers to minimize hygenic concerns. The first facilities are set to arrive in the summer of 2014.
Nonetheless I find this problem to be much less severe than in the New York City of old, perhaps because merchants are less worried about you shooting up drugs in their bathroom.
There is more here, with visuals, and for the pointers I thank Samir Varma and Bill Badrick.
February 21, 2014
New trend of people naming their kids after guns
Via Kottke, here is :
In 2002, only 194 babies were named Colt, while in 2012 there were 955. Just 185 babies were given the name Remington in 2002, but by 2012 the number had jumped to 666. Perhaps the most surprising of all, however, is a jump in the name Ruger’s (America’s leading firearm manufacturer) from just 23 in 2002 to 118 in 2012. “This name [Ruger] is more evidence of parents’ increasing interest in naming children after firearms,” Wattenberg writes. “Colt, Remington, and Gauge have all soared, and Gunner is much more common than the traditional name Gunnar.”
WalMart fact of the day
Wal-Mart has 1.3 million U.S. employees, and about 4,000 of them currently make either a state or federal minimum wage, Tovar said.
There is more here, via @ModeledBehavior., who points out that is about 0.3%, and Clive Crook.
The tax treatment of sperm and egg sales
But what kind of income is it?:
Also, Perez could pay lower tax rates on the income if it were treated as long-term capital gains. Eggs could be considered property she had possessed since birth, in which case the sale could be seen as a long-term capital gain.
If they’re not considered property until removed from her body, the eggs could be seen as generating short-term gains.
Richard Carpenter, Perez’s San Diego-based attorney, said the judge said after the trial that the capital gains questions wouldn’t apply in this case.
I like the phrase “future sperm tax certainty” from the title of the piece. There is more here, from Richard Rubin. For the pointer I thank Vic Sarjoo.
High prices for broadband, contestability, and Google Fiber
Here is a potential new development:
Verizon is adding more antennas to its network, forming smaller wireless cells with stronger coverage and rolling out service on new segments of the wireless spectrum, the digital equivalent of opening new lanes for traffic. Sprint is introducing a service called Sprint Spark that increases access speeds if customers have devices that can use multiple wireless frequencies at once.
If pCell works as promised, Mr. Perlman’s technology could result in much bigger gains in wireless speeds. In traditional cellular networks, antennas placed around a city transmit wireless signals to all of the mobile devices within their area. As more people enter an area, they share the wireless network with everyone else there, resulting in slower speeds. Wireless carriers cannot simply solve the problem by putting antennas everywhere because their signals can be disrupted if they are too close together.
With a network of pCell antennas, someone with a mobile device will get access to the full wireless data speed in the area, regardless of how many other people are sharing that network, Mr. Perlman said.
There is also this:
The plan is to bring Google Fiber to 34 cities and see how that goes.
Here are various satellite video streaming services.
I do not feel I can judge the prospects for these developments. The point, however, is this. Improving connectivity is an extremely dynamic market sector. A high mark-up on cable internet connectivity, as might be applied by say a Comcast monopolist, is also creating a “prize” for further innovation in the sector. Admittedly one does not prefer to have this prize funded by deadweight loss (less broadband consumption) but virtually all prizes are funded by deadweight loss in some manner rather than by lump sum taxation.
When people claim “the current mark-up is too high,” that is an entirely reasonable stance. But when you rewrite it as “the current innovation prize, funded out of deadweight loss” is too high, that reframing brings some clarity, some moderation, and I think also induces some more agnosticism about the costs of the current semi-monopoly. For similar reasons I don’t worry about monopoly in the eBook market and the like and there the case for simply ignoring the problem is much stronger because the options and cheapness have exploded so radically and so quickly.
So I don’t see the current cable semi-monopoly as lasting that long. And its current cost cannot be that much higher than the cost of sending a disc in the mail, otherwise the disc would be sent. Alternatively, most communities have public libraries which offer pretty good and pretty free internet connections, including video streaming of course. If the argument is simply “this prize, for future connectivity innovation, cannot be funded from deadweight loss because it means that in the meantime some poorer people will have to wait to get their discs in the mail and make too many trips to the public library”…well, I guess I’m not that impressed this is a major public policy problem.
The longer and more you regulate cable prices, the longer it will take this sector to reach a more competitive equilibrium.
By the way, dear reader, I am not clever enough to use Netflix streaming, as I find the TV menu confusing. So I still get the discs in the mail.
February 20, 2014
The life of a Western economist in China
For most academics not in China, it is difficult for them to understand the level of scrutiny and monitoring we face on regular basis. Most professors have students assigned to monitor them and security officials approaching many people to report on our behavior. Our email is widely acknowledged, even by students, as being read. While there are some overt obvious forms of intimidation as I have detailed, much of it is also the “deal you can’t refuse” variety. There are no overt threats but the message is clear.
There is much more here, from Christopher Balding (pdf of his vita), worth the read.
The economics of compensated pregnancy surrogates, and who wants surrogates?
From Anemona Hartecollis, here are some interesting points:
Agencies prefer to contract with surrogates who are married with children, because they have a proven ability to have a healthy baby and are less likely to have second thoughts about giving up the child.
Conversely, gay couples are popular among surrogates. “Most of my surrogates want same-sex couples,” said Darlene Pinkerton, the owner of A Perfect Match, the agency in San Diego that Mr. Hoylman used. Women unable to become pregnant often go through feelings of jealousy and loss, she said. But with gay men, that is not part of the dynamic, so “the experience is really positive for the surrogate.”
Or as her husband, Tom, a third-party reproductive lawyer, put it, “Imagine instead of just having one husband doting on you, you have three guys now sending you flowers.”
The piece is interesting throughout.
Assorted Thursday links
1. Economic turnaround in Bolivia.
2. Running from the knowledge.
3. Are there no Ricardian cows?
4. “Prof Higgs went to bed early.”
5. Master monkey, avatar monkey.
6. An attack on applying economic reasoning to sex and romance. Example of how people respond to economic arguments in this area, rightly or not.
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