Tyler Cowen's Blog, page 512

The virtual grocery store

A Chicago “L” station is about the last place you would think of to pick up a carton of milk.

But online grocer Peapod has turned a busy CTA station at State and Lake streets into a virtual supermarket aisle, enabling commuters to use their smartphones to scan and buy any of 70 items.

Appearing overnight on once-barren walls, 7-foot-tall virtual shelves line both sides of a 60-foot tunnel, filled with everything from paper towels and diapers to fresh produce. Android and iPhone users can download a free Peapod mobile app to load up their electronic grocery carts for delivery the next day.

Here is more, and for the pointer I thank Steve Weir.  File under “The Death of Retail Progresses.”

The Independent on *An Economist Gets Lunch*

The review is here, by Will Dean, the summary is here:

If you’re interested in how the food and restaurant industries work – and how to exploit those factors for your own good – then Cowen’s work is indispensable.

And:

All good advice. It has no recipes, few restaurant recommendations and no famous chef names, but An Economist Gets Lunch might be the most interesting book about food you read all year.

NPR interview with Ronald Coase

It is here, at age 101.  Excerpt:

China’s rapid emergence as a global economic power — one of the most important developments of the past generation — took him completely by surprise.

“I thought it would take 100 years, if not more,” Coase said.

It seemed striking that an economic legend could be so wrong about such an important subject. I asked Coase what he made of this.

“I’ve been wrong so often I don’t find it extraordinary at all,” he said.

For the pointer I thank Daniel Klein.

China fact of the day

China announced Thursday that growth in imports had unexpectedly come to a screeching halt in April — rising just 0.3 percent from the same period a year earlier, compared with expectations for an 11 percent increase. Businesses across the country appeared to lose much of their appetite for products as varied as iron ore and computer chips.

Here is more.

Work as a censor

Working as a censor is interesting. “I like this work. It gives us experience, information and we always learn something new. It takes about a year or a year and a half to become a censor, as the person is first employed as a censor assistant. The employee first starts slow in reading and it takes him a week or days to finish a book. Also, beginners are not given political or religious books in the beginning as these are difficult. Instead we give them children’s books or some scientific books, which are easy,” said Dalal.

In some religious books, the censorship department cooperates with the Ministry of Endowments. “Religious opinions may differ and that’s why we demand a professional explanation, although we have some censors who are graduates of the Faculty of Islamic Law. Some religious issues are transferred to the Ministry of Endowments and Islamic Affairs. The banned books include publications printed in Israel, Christian missionary and Jewish books and other similar books,” she noted.

From Kuwait, here is more.  By the way, “a philosophical book needs about four days to read,” Dalal added.”

Hat tips go to Bookslut and @StanCarey.

Gay Marriage Politics

From the NYTimes:

President Obama’s endorsement of gay marriage on Wednesday was by any measure a watershed.

…Mr. Obama faces considerable risk in jumping into this debate, reluctantly or not, in the heat of what is expected to be a close election.

As of today, however, Intrade shrugged it off; that could mean the issue won’t play much of a role or that the political forces are equally balanced but that volatility could be higher in the future. My guess is the former, a lot of talk but when it comes to swing votes no action. We have come a long way.

 

Claims about gelatophobia

The fear of being laughed at (gelotophobia) was examined in its relations to concepts from positive psychology in Austria, China, and Switzerland. It was related to satisfaction with life and Peterson et al.’s (2005) three orientations to happiness; the life of pleasure (hedonism), life of engagement (related to flow-experiences), and life of meaning (eudaimonia). Participants (N = 744) completed self-report measures of gelotophobia, satisfaction with life, and orientations to happiness. The results revealed that gelotophobia could be found in all three countries. The participants exceeded cut-off points indicating gelotophobia in Austria (5.80%), China (7.31%), and Switzerland (7.23%). The fear of being laughed at was negatively related to life-satisfaction in all three countries. Gelotophobes described themselves with lower overall estimations of their lives. Gelotophobia was negatively correlated with life engagement (i.e., flow experiences). In China, gelotophobia was also related to a lower life of pleasure and life of meaning. Overall, the results show that gelotophobes do not pursue any of the three orientations to happiness. Interventions from positive psychology (e.g., enhancing satisfaction with life, strengthening the routes to happiness) are discussed as possible treatments of gelotophobia.

That is from the International Journal of Humor Research, here is more.  Hat tip goes to the always-excellent @udadisisuperior.

The Lord Monboddo screensaver

The 8-year-old twins love their iPad. They draw, play games and expand their vocabulary. Their family’s teenagers also like the hand-held computer tablets, too, but the clan’s elders show no interest.

The orangutans at Miami’s Jungle Island apparently are just like people when it comes to technology. The park is one of several zoos experimenting with computers and apes, letting its six orangutans use an iPad to communicate and as part of a mental stimulus program. Linda Jacobs, who oversees the program, hopes the devices will eventually help bridge the gap between humans and the endangered apes.

How about this?:

“Our young ones pick up on it. They understand it. It’s like, ‘Oh I get this,’” Jacobs said. “Our two older ones, they just are not interested. I think they just figure, ‘I’ve gotten along just fine in this world without this communication-skill here and the iPad, and I don’t need a computer.’”

Here is more, and for the pointer I thank Daniel Klein.

Very good sentences

Amazon is so serious about its next big thing that it hired three women to do nothing but try on size 8 shoes for its Web reviews. Full time.

The article is here, and for the pointer I thank Neville Andrew Mehra.

Economic growth is not contractionary, and other confusions about stimulus and spending

Let’s say that private gdp is 100 and government spending is 100.  Gdp then suddenly goes up to 200, so government spending as a percentage of gdp falls from 50% to 33.3%.  This is not a contractionary event.  It is fully possible to argue “government spending should go up too, to slot more public goods into the larger output,” but the initial change is expansionary, even though government spending as a percentage of gdp took a steep dive.

Let’s say that private gdp is 100 and government spending is 100.  Government spending stays the same in nominal terms but there is overall price inflation from a nominal change.  It is fully possible to argue “government spending should go up too, to restore the percentage of public goods in national output,” but the initial change is again expansionary in macroeconomic terms.  Nominal values are up.

In other words, when judging whether fiscal policy is contractionary or expansionary in macroeconomic terms, we do not automatically adjust for percentage of gdp and inflation.  Start instead by looking at nominal government spending, and then perhaps take a glance at nominal gdp or related measures.  The theory, after all, is about nominal values, most of all in the short run.

If you wish, I could construct a similar exercise for population or an increase in the labor force and come out with a similar result.

There is one case you could embrace (though I don’t see the critics doing it).  Say gdp is 100 and government spending is 100.  A negative real shock lowers real gdp and creates some price inflation.  Nominal government spending stays the same but in real terms it falls and that is quite possibly contractionary.  In that case the “adjustment for inflation” makes more sense, because the boost in prices is not producing some other positive, expansionary pressure.  That scenario is fully coherent, but of course suddenly the negative real shock is the major problem and the fall in government spending is a secondary and derivative problem, albeit a potentially important one.

Going back to my initial post on European fiscal policy, there are many upset commentators but in general they are not grasping these points much less responding to them or showing some level of understanding which is deeper than my own.

I am more than willing to admit that there are deeper understandings yet than what I offer in this post, but we are not at them yet, not in this discourse at least.

I don’t wish to respond point-by-point to some of the writings in the blogosphere, but given the above, Ryan Avent also is not looking deeply enough.  Both he and Brad Plumer did not see that the posts in question clearly distinguished between spending cuts and “austerity” (Brad did issue what is arguably a correction.)  I admire both bloggers and read them regularly, but these two posts both fail; here are some comments from Veronique.  I would say there is a dominant narrative, repeated many times in not always precise language, which people find it very hard to think outside of.

Most of the time “austerity” is a misleading word and more precise concepts — readily intelligible I might add — are available.  There really are some times when we should relabel austerity as “mostly tax increases,” but many people are reluctant to do so.