Tyler Cowen's Blog, page 39

Which is the most improved vacation opportunity for American dollars?

Sam asks:

Given all the recent global currency changes, and other turmoil, what is the best vacation destination for American’s who earn dollars.

Is it possible that I/others can go somewhere previously unaffordable because of the changes?

The dollar is much stronger in many parts of the world these days.  But the currency of Ukraine has taken an especially steep dive as of late.  It’s down about 17% in the last two weeks and that is mostly for geopolitical reasons, not hyperinflation.  So go quickly, and avoid the East!  I hear Kiev is lovely in February.

Given government shenanigans, it is hard to get a read on the true price level and real exchange rate in Argentina, but the country has offered incredible bargains during crises in times past, and our winter is their summer.  Brazil has become much cheaper, relative to the past, but it still feels more expensive than traveling in the U.S., for the most part.  But if you are convinced you must go there, try now.  Tokyo is much cheaper than people think, but that has been the case for quite a while.

In my opinion most of the eurozone is at about PPP right now for Americans, Berlin has the best bargains, maybe Paris the worst.  Spain and Portugal to me seem to have had a lot of unreported deflation.  Just say nein to die Schweiz, they let Scott Sumner down and now you must pay for that.

Mexico remains a tremendous bargain, with a rate of about fifteen pesos to one dollar.  The best food in Mexico only costs about $2.50 a meal to begin with, now it is cheaper yet.  Most of the country is quite safe, in Yucatan the murder rate is about as low as in Finland.

The Sacred Introvert Retreat Tour markets in everything

The first Sacred Introvert Retreat Tour will take place this coming May, led by founder Lisa Avebury. Over ten days, participants will visit Glastonbury and other sites in south east England. Travellers will each have their own room and every other day will be a ‘local’ day, when visitors can rest and recharge in the peaceful surroundings of Glastonbury Abbey Retreat. The tour includes visits to mystical, historical sights such as the stone circle and the Chalice Well — where the Holy Grail is supposedly hidden. There are relaxed day trips to medieval churches and roman baths, optional yoga sessions and evening activities such as torchlit walks and bonfires.

Lisa Avebury, a self-proclaimed introvert, founded the retreat company to give quieter individuals a group travel option which catered to their needs, where silences are comfortable and socializing is optional, not mandatory. The trips costs USD 3,795 excluding flights and Avebury hopes it will be the first of many.

There is more here, and for the pointer I thank Michael Rosenwald.

Assorted links

1. What Chris Blattman has been reading.

2. How capital regulations are changing banks.

3. Yet more cruelty to robot dogs.

4. German performs iPad magic tricks; perhaps he also was negotiating with Greece.

5. The Greek agreement, annotated.

*Misbehaving: The Making of Behavioral Economics*

That is the new and forthcoming book from Richard H. Thaler, due out in May.  It is excellent and fascinating, and yes even if you have read all of the other popular books on behavioral economics you should read this one too.

The title is good but I find the subtitle even more alluring.  For me the very best parts of the book are about Thaler’s career as an economist.  Indeed much of the book traces the development of behavioral economics through a biographical lens.  Here is one excerpt:

…my thesis advisor, Sherwin Rosen, gave the following as an assessment of my career as a graduate student: “We did not expect much of him.”

And:

I spent a fair amount of time staring at the List and adding new items, but I did not know what to do with it.  “Dumb stuff people do” is not a satisfactory title for an academic paper.

Other figures of note make cameo appearances in the book, including Cass Sunstein and John Lott.

Articles and tweets about Amartya Sen which I do not really understand

Here is one account:

Nobel Laureate Amartya Sen, today withdrew his candidature for a second term as Nalanda University chancellor. He blamed this on the Government’s delay in approving his candidature. He also alleged that the Government is using its political might to “interfere in academic matters“. He was helped by fellow “liberals” on Twitter, in playing the victim of political vendetta.

Here is Sen’s full letter of protest.  Here is the matter trending on Twitter.  Many of the opinions expressed are rather strong.

The Rise of Opaque Intelligence

Many years ago I had a job picking up and delivering packages in Toronto. Once the boss told me to deliver package A then C then B when A and B were closer together and delivering ACB would lengthen the trip. I delivered ABC and when the boss found out he wasn’t happy because C needed their package a lot sooner than B and distance wasn’t the only variable to be optimized. I recall (probably inaccurately) the boss yelling:

Listen college boy, I’m not paying you to think. I’m paying you to do what I tell you to do.

It isn’t easy suppressing my judgment in favor of someone else’s judgment even if the other person has better judgment (ask my wife) but once it was explained to me I at least understood why my boss’s judgment made sense. More and more, however, we are being asked to suppress our judgment in favor of that of an artificial intelligence, a theme in Tyler’s Average is Over. As Tyler notes notes:

…there will be Luddites of a sort. “Here are all these new devices telling me what to do—but screw them; I’m a human being! I’m still going to buy bread every week and throw two-thirds of it out all the time.” It will be alienating in some ways. We won’t feel that comfortable with it. We’ll get a lot of better results, but it won’t feel like utopia.

I put this slightly differently, the problem isn’t artificial intelligence but opaque intelligence. Algorithms have now become so sophisticated that we human’s can’t really understand why they are telling us what they are telling us. The WSJ writes about driver’s using UPS’s super algorithm, Orion, to plan their delivery route:

Driver reaction to Orion is mixed. The experience can be frustrating for some who might not want to give up a degree of autonomy, or who might not follow Orion’s logic. For example, some drivers don’t understand why it makes sense to deliver a package in one neighborhood in the morning, and come back to the same area later in the day for another delivery. But Orion often can see a payoff, measured in small amounts of time and money that the average person might not see.

One driver, who declined to speak for attribution, said he has been on Orion since mid-2014 and dislikes it, because it strikes him as illogical.

Human drivers think Orion is illogical because they can’t grok Orion’s super-logic. Perhaps any sufficiently advanced logic is indistinguishable from stupidity.

Hat tip: Robin Hanson for discussion.

Oceanic average is over

The animals in the ocean have been getting bigger, on average, since the Cambrian period – and not by chance.

That is the finding of a huge new survey of marine life past and present, published in the journal Science.

It describes a pattern of increasing body size that cannot be explained by random “drift”, but suggests bigger animals generally fare better at sea.

In the past 542 million years, the average size of a marine animal has gone up by a factor of 150.

It appears that the explosion of different life forms near the start of that time window eventually skewed decisively towards bulkier animals.

Today’s tiniest sea critter is less than 10 times smaller than its Cambrian counterpart, measured in terms of volume; both are minuscule crustaceans. But at the other end of the scale, the mighty blue whale is more than 100,000 times the size of the largest animal the Cambrian could offer: another crustacean with a clam-like, hinged shell.

There is more here, and here is Wikipedia on Cope’s Rule.  Here is one possible explanation.  Does the Rule apply to dinosaurs?  I wonder if the risk-adjusted returns to species size also are going up.

Inequality vs. the productivity slowdown

Greg Mankiw writes:

The Economic Report of the President was released today.  A friend draws my attention to Table 1-3 on page 34, which presents several historical counterfactuals.  It finds:

1. If productivity growth had not slowed after 1973, the median household would have $30,000 of additional income today.

2. If income inequality had not increased after 1973, the median household would have $9,000 of additional income today.

So, which is the bigger problem?

University of Chicago Summer Institute on Field Experiments

The Department of Economics at the University of Chicago announces the first annual Summer Institute on Field Experiments for scholars, to be held the summer of 2015 at the Saieh Hall for Economics. The Summer Institute will train the brightest young researchers to partner with key stakeholders in government, industry, and the not-for-profit sector to solve the unique problems faced in society through applying economic theory and rigorous field experiment methods.

Organized by John List, there is more information here, a post by Steve Levitt on the Institute here.  Many of you should consider applying.

The military that is German

The German army has faced a shortage of equipment for years, but the situation has recently become so precarious that some soldiers took matters into their own hands.

On Tuesday, German broadcaster ARD revealed that German soldiers tried to hide the lack of arms by replacing heavy machine guns with broomsticks during a NATO exercise last year. After painting the wooden sticks black, the German soldiers swiftly attached them to the top of armored vehicles, according to a confidential army report which was leaked to ARD.

…To make matters worse, the broom-equipped German soldiers belong to a crucial, joint NATO task force and would be the first to be deployed in case of an attack.

There is more here.