Tyler Cowen's Blog, page 531

Corporate cash and Apple

Apple alone represents $64 billion or 36% of the total $179 billion increase in corporate cash since 2009. And in 2011, overall corporate cash would have actually declined by $6 billion had it not been for Apple's $46 billion increase.

…Supported by our expectations that consumers worldwide will continue to feast on Apple products, we expect overall corporate cash and its concentration will increase in 2012. Apple alone could represent 12% of total corporate cash, about three times more than the next cash king. …

There is more here, and I thank Brian Bares for the pointer.

Assorted links

1. The economics of monkey catchers in India; "the monkeys are winning."

2. The economics of rebranding.

3. Felix Salmon on potential output, and Greg Ip, both excellent posts full of depth.  Kevin Drum comments.

4. Hoist with their own petards, and which animal has the largest eyeballs and why?

5. Katherine Mangu-Ward on Jonathan Haidt.

Top marginal tax rates, 1958 vs. 2009

That is another excellent post from Timothy Taylor.  Excerpt:

It's interesting to note that the share of income tax revenue collected by those in the top brackets for 2009–that is, the 29-35% category, is larger than the rate collected by all marginal tax brackets above 29% back in the 1960s.

And:

Raising tax rates on those with the highest incomes would raise significant funds, but nowhere near enough to solve America's fiscal woes. Baneman and Nunns offer this rough illustrative estimate: "If taxable income in the top bracket in 2007 had been taxed at an average rate of 49 percent, income tax liabilities (before credits) would have been $78 billion (6.7 percent of total pre-credit liabilities) higher, taking into account likely taxpayer behavioral responses to the rate increase." The behavioral response they assume is that every 10% rise in tax rates causes taxable income to fall by 2.5%.

And this zinger:

One could also use the example of 1959 to argue that many more taxpayers in the broad range of lower- and middle-incomes should face marginal federal tax rates in the range of 16-28%.

I do not favor such a shift, yet somehow that is a neglected comparison.

*A Naked Singularity*

Contemporary American fiction faces an ongoing problem of what to write about.  Yuppie life in Brooklyn doesn't have the gravitas, suburban ennui is long since overdone, and so much of American life — mostly  for the better — doesn't face serious moral choices.  Sergio de la Pava has solved this problem by writing about the American legal system, set in New York City and with a Colombian immigrant public defender.  At first I was skeptical but at page 256 (out of 678) it is still getting better.  It is likely to make my "best of the year" list.  My five word summary would be "A more approachable William Gaddis."  You will note it is published by University of Chicago press and presumably it is "too serious" to have attracted a major trade contract.  It's not for everyone, but it's living up to its billing as a sleeper under the radar.  You can pre-order it here.

Very good sentences

If the Fed is targeting inflation, then there is no liquidity trap, no paradox of thrift, no paradox of toil, no fiscal multiplier, no "Depression economics."

That is from Scott Sumner, Q.E.D.  The rest of the post is about Switzerland, sort of.  Scott also reports in a p.s.:

The CA data is from the most recent issue of The Economist.  They also report that the consensus forecast for RGDP growth in the US is 2.1% in 2012 and 2.2% in 2013.  Because we are in a recovery, that's obviously higher than the consensus forecast of trend growth.  In other words, most economists now see the US trend rate of RGDP growth as being something like 1.5%.  After 150 years of 3% trend, that's a startling downshift.  Tyler Cowen is no longer a contrarian; The Great Stagnation is now conventional wisdom.

Has baseball become an inferior good?

From John D. Burger and Stephen J.K. Walters:

World Series telecasts are now an inferior good. Income and the time cost of consumption interact so that a ten percent income increase reduces viewership by 1.8 million households. Increased availability of substitutes reduces ratings but increased drama improves them.

What does that say about the future of the sport?  About the future of television?

For the pointer I thank Kevin Lewis.

Assorted links

1. Why is there no European economics blogosphere?  From the new blog Bruegel, which is trying to set things right.

2. What are the odds of predicting a perfect NCAA tournament bracket?, and the precognition results are not replicating.

3. There is no great stagnation, captive canine edition.

4. Why finish books, via Chris F. Masse.

5. IQ, Elo difference, and winning arguments.

Innovations>Patents

AEI held a session on patents and patent reform building off Launching the Innovation Renaissance. I opened and Judge Paul Michel, Chief Judge, United States Court of Appeals for the Federal Circuit (retired), James DeLong of the Convergence Law Institute and Michael Abramowicz of George Washington University School of Law all offered comments.

Here is one brief bit from my talk. You can find the whole thing here.

Chimpanzees have police officers

Anthropologists now reveal that chimpanzees mediate conflicts between other group members, not for their own direct benefit, but rather to preserve the peace within the group. Their impartial intervention in a conflict — so-called "policing" — can be regarded as an early evolutionary form of moral behavior.

…primatologists from the University of Zurich can now confirm that chimpanzees intervene impartially in a conflict to guarantee the stability of their group. They therefore exhibit prosocial behavior based on an interest in community concern.

…The willingness of the arbitrators to intervene impartially is greatest if several quarrelers are involved in a dispute as such conflicts particularly jeopardize group peace.

…It is primarily high-ranking males or females or animals that are highly respected in the group that intervene in a conflict. Otherwise, the arbitrators are unable to end the conflict successfully. As with humans, there are also authorities among chimpanzees.

The article is here and for the pointer I thank Eduardo Pegurier.

Berlin fact of the day

Berlin has some catching up to do. Apartments in Berlin cost just 25% more in 2010 than in 1977, whereas prices in Hamburg and Munich—Germany's second- and third-largest cities—rose by 55% and 135%, respectively, over the same period, according to real-estate association Immobilienverband Deutschland, or IVD.

Last year, the average price paid for apartments in popular Berlin locations was €1,700 ($2,221) a square meter, up from €1,625 a year earlier, and rose to €1,300 a square meter from €1,200 in standard locations, according to IVD. (One square meter equals 10.8 square feet.) This compares with €2,230 a square meter for high-quality condominiums in Hamburg, and €2,890 in Munich.

That, in a nutshell, is why Berlin is probably the best city in the world right now.  The article is here.