Tyler Cowen's Blog, page 456

The science of conducting?, and homage to Clive Granger

From The Economist:

DO ORCHESTRAL conductors do anything useful? Alessandro D’Ausilio of the Italian Institute of Technology, in Genoa, and his colleagues tried to answer that eternal question in a study published in the Public Library of Science.

And:

Each violinist had an infra-red reflector attached to the tip of his bow, and the conductors had them attached to their batons. Dr D’Ausilio and his team were thus able to follow the movements of both bows and batons by bathing their little orchestra in infra-red light, which their cameras could see, but human beings cannot. They then used the movements of the reflectors to analyse who was affecting whom.

To do this, Dr D’Ausilio employed a mathematical trick called the Granger causality test…

And the (tentative I would say) result:

The findings are in harmony with what conductors knew all along: that baton-toting despots, like the late Herbert von Karajan, do add value—but only if they rein in the uppity musicians in front of them.

Bowles, Kirman, and Sethi have a new paper on Hayek

It is here, I have yet to read it.  For the pointer I thank Andrew Farrant.

China fact of the day

The gap between the nominal and official number of urban residents is large enough to fit the entire population of Brazil.

That is from Nicholas Borst, the blog post is interesting throughout on Chinese urbanization.

Economists who are clergy

Your post on economist/artists got me thinking about economists/clergy.

Obviously the most famous is Reverend Malthus. A Google search for “Economist Catholic priest” didn’t turn up much. “Economist rabbi” discloses that Israel Kirzner is the rabbi of a congregation in Brooklyn. “Economist clergyman” turned up Richard Jones but I’ve never heard of him. Economist/Jesuit turned up a number of names, all of them obscure to me.

Asher Meir also writes to me:

My favored explanation is that ”clergy” is an artificially higher bar than “artist”. Probably a large number of economists are and were devout people with learned and creative views on religion without having been ordained. E.g. Karl Homann is a first-rate theologian but not a priest. Robert Aumann is a first-rate Talmud scholar but not a rabbi. If the bar for “clergy” were parallel to that for “artist” these fellows would certainly make it.

Who else comes to mind?  The School of Salamanca, and going back many medieval theologians wrote on economic issues.  Paul Heyne.  Heinrich Pesch.  Galiani was an Abbey.  Philip Wicksteed was a Unitarian theologian.  The still underrated Richard Whately was the Archbishop of Dublin.  Bishop George Berkeley wrote on monetary theory, as did Reverend Jonathan Swift.

The 18th century clergyman John Witherspoon wrote on monetary economics.  Thomas Chalmers, who wrote on the Poor Laws and theories of underconsumption in the early 19th century, was ordained in the Church of Scotland.

Did all these 19th century figures really want to be economists, really want to be clergy, or both?

I thank Maria Pia Paganelli for a useful discussion of this point.

What do barter exchanges imply about depressions and recessions?

As was the case during the Great Depression, parallel currencies and barter exchanges are springing up around Spain and some other parts of Europe.  Here is one account:

Psychologist Angels Corcoles recently taught a seminar about self-empowerment for women, and when she finished the organizers handed her a check with her fee. The amount was in hours, not euros.

But Corcoles didn’t mind. Through a citywide credit network that allows people to trade services without money, the 10 hours Corcoles earned could be used to pay for a haircut, yoga classes or even carpentry work.

At a time when the future of the euro is in doubt and millions are unemployed or underemployed with little cash to spare, a parallel economy is springing up in parts of Spain, allowing people to live outside the single currency.

In the city of Malaga, on the country’s southern Mediterranean coast just 80 miles from Africa, residents have set up an online site that allows them to earn money and buy products using a virtual currency. The Catalonian fishing town of Vilanova i la Geltru has launched a similar experiment but with a paper credit card of sorts. It implements a new currency worth slightly more than the euro when it is used at local stores.

You can find another series of accounts here.

One interesting feature of these enterprises is that they push a bit of emphasis away from sticky wage and price theories of depressions.  In essence the sellers participating in these exchanges are price discriminating, by trying to sell more of their output — for lower prices — through credit or barter mechanisms.  Getting back credits in return really is like receiving a lower price or wage.  So these exchanges show that at least some people are wildly willing to cut prices, wages, and returns, if only to sell more.

(Please, no need for a lecture here on Keynes and downward price spirals; the ECB is keeping a price floor at the very least.)

So which factors behind depressions receive marginal support from the prevalence of these practices?  First, these exchanges are a substitute for dysfunctional credit markets.  Second, these exchanges attempt to solve the buyer-seller-buyer coordination problems analyzed by Clower, Leijonhufvud, and others.

Get your Arnold Kling fix here

Here is Arnold on on-line education.  Excerpt:

I am optimistic about tablets in large part because I believe that a magic bullet in educational technology is the adaptive textbook. By that, I mean an electronic textbook that adjusts to the cognitive ability and learning style of the student. Adaptive textbooks will query students in order to make sure that they understand what they have been studying. They will also respond to student queries. Adaptive textbooks will implement the many-to-one teaching model.

A glimpse of what lies in store can be found at the Inquire Project, which describes “an iPad app that combines the popular Campbell Biology textbook with a knowledge representation and reasoning system that answers students’ questions about the material.”

why are americans less stylish than europeans/japanese?

From Bob Unwin:

i mean style in clothing, but the same question could be asked about taste in architecture, interior design and other domains. (blog post by a fashion person: http://bangsandabun.com/2010/03/europeans-dress-better-than-americans-fact/)

1. greater average distance to a major fashion center. both physical and cultural distance.

2. less urbanization [these points 1&2 were maybe more important in the past]

3. distance from europe and few of the relevant european style-leaders emigrating

4. different signaling aims (more internal cultural diversity and weaker class distinctions; male clothing needing to be less ‘gay’ and more conventional).

5. any relation to the late blooming of US visual art and music on the world scene?

6. american is more informal in style and has been an influential exporter of informal styles (this doesn’t undermine the general point about the style difference)

related question: are there any fashionable american economists? i’d be especially interested in any that dress like artists or literary intellectuals.

Assorted links

1. What are the cues of distrust?

2. Why women succeed.

3. The throwing gap.

4. Chinese Straussians analyze America.

5. Cars that communicate with each other, and the road, are being tested in Michigan.

An empirical look at Austrian trade cycle theory

From Robert B. Lester and Jonathan S. Wolff:

Austrian Business Cycle Theory, as espoused by Mises (1912,1949) and Hayek (1935), predicts changes in the economy’s structure of production following an unexpected change in monetary policy. In particular, the theory predicts that following a credit expansion the production and price of goods further away from �final consumption increase relative to the production of other goods in the economy. Despite the emphasis on the importance of relative prices and the structure of production, most of the existing empirical work discussing the relevance of the theory uses aggregate data. We rectify this, by using stage-of-process data to illustrate the relevance of the theory. We �find that mechanisms emphasized by the theory are either not supported by the empirical results or are of second order importance in explaining the e�ffects of monetary policy.

The Flynn Effect in East Germany

Economic, Educational, and IQ Gains in Eastern Germany 1990-2006 (gated), Eka Roivainen, Intelligence, Nov/Dec 2012

Abstract: Lynn and Vanhanen (2012) have convincingly established that national IQs correlate positively with GDP, education, and many other social and economic factors. The direction of causality remains debatable. The present study re-examines data from military psychological assessments of the German federal army that show strong IQ gains of 0.5 IQ point per annum for East German conscripts in the 1990s, after the reunification of the country. An analysis of IQ, GDP, and educational gains in 16 German federal states between 1990 and 1998 shows that IQ gains had a .89 correlation with GDP gains and a .78 correlation with educational gains. The short time frame excludes significant effects of biological or genetic factors on IQ gains. These observations suggest a causal direction from GDP and education to IQ.

For the pointers I thank Michelle Dawson and Ron Unz.