Tyler Cowen's Blog, page 539
March 2, 2012
Not a joke
…as far as I can tell. From a quite reputable newspaper, here goes:
For 150 years, no country has expressed interest in adopting the Canadian dollar — the poor cousin to the coveted greenback.
But now tiny Iceland, still reeling from the aftershocks of the devastating collapse of its banks in 2008, is looking longingly to the loonie as the salvation from wild economic gyrations and suffocating capital controls.
And for the first time, the Canadian government says it's open to discussing the idea.
In brief remarks to be delivered Saturday in Reykjavik, Canadian ambassador Alan Bones will tell Icelanders that if they truly want the Canadian dollar, Canada is ready to talk.
But he will warn Icelanders that unilaterally adopting the loonie comes with significant risk, including complete loss of control over their monetary policy because the Bank of Canada makes decisions only for Canadians and the Canadian economy.
Kudos to all of you who had been predicting that.
For the pointer I thank M Kaan, maybe someone is playing an elaborate joke on Bob Mundell here.
True or false?
As commodities prices fall, the rights of women rise.
James Q. Wilson has passed away at 80
He was one of America's leading social scientists, here is one appreciation. Here is his Wikipedia page. Here is a 1995 interview with Reason magazine. Here is Wilson on scholar.google.com. Here is his address on the moral sense (pdf). Here is one of his famous essays on police behavior. Here are some remarks in praise of Wilson. Here are many more links.
I think of him as one of the few people who had a truly famous and memorable middle initial.
What is your most surprising prediction?
That is the new lunch time question for visitors. This week we asked Michael Mandel and Megan McArdle.
The old question was "What is your most absurd belief?" (Initiation here, and some answers here).
When should you ask about inputs and when should you ask about outputs? Someone might believe that planet earth is built upon "turtles all the way down," and still expect 2.2 percent yearly growth in gdp and a lot of pennants for the New York Yankees.
It can be hard to judge how surprising various predictions are. Nonetheless I expect median real wages to continue to decline, over the next ten years, in the non-resource-rich wealthy countries of the world, no Norway please. TGS means that we cannot so readily outrace factor price equalization by keeping one step ahead, the exciting innovations are mostly labor-saving, educational stagnation will just be kicking in, and otherwise American workers really aren't that much better than the competition.
Do I also expect another outbreak of conflict in the Falklands? The prediction of fascism in Hungary is no longer a surprise.
Readers, what is your most surprising prediction?
Addendum: Angus comments.
There is no great stagnation
The drone of speakers who won't stop is an inevitable experience at conferences, meetings, cinemas, and public libraries.
Today, Kazutaka Kurihara at the National Institute of Advanced Industrial Science and Technology in Tskuba and Koji Tsukada at Ochanomizu University, both in Japan, present a radical solution: a speech-jamming device that forces recalcitrant speakers into submission.
The idea is simple. Psychologists have known for some years that it is almost impossible to speak when your words are replayed to you with a delay of a fraction of a second.
Kurihara and Tsukada have simply built a handheld device consisting of a microphone and a speaker that does just that: it records a person's voice and replays it to them with a delay of about 0.2 seconds. The microphone and speaker are directional so the device can be aimed at a speaker from a distance, like a gun.
In tests, Kurihara and Tsukada say their speech jamming gun works well: "The system can disturb remote people's speech without any physical discomfort."
Their tests also identify some curious phenomena. They say the gun is more effective when the delay varies in time and more effective against speech that involves reading aloud than against spontaneous monologue. Sadly, they report that it has no effect on meaningless sound sequences such as "aaaaarghhh".
Kurihara and Tsukada make no claims about the commercial potential of their device but list various aplications. They say it could be used to maintain silence in public libraries and to "facilitate discussion" in group meetings. "We have to establish and obey rules for proper turn-taking when speaking," they say.
Here is more, and for the pointer I thank Michelle Dawson, here is her recent dialogue.
March 1, 2012
Facts about welfare transfers
In 1968, the in-kind share of assistance was 60 percent; now it is 85 percent.
That is from Ed Glaeser, who believes we should use more cash payments and less in-kind assistance.
Addendum: Kevin Drum comments.
New results on the missing women question
This paper (pdf) came out about two years ago, by Siwan Anderson and Debraj Ray, in the highly esteemed Review of Economic Studies, yet I haven't seen it discussed in the blogosphere, so here goes:
Relative to developed countries and some parts of the developing world, most notably sub-Saharan Africa, there are far fewer women than men in India and China. It has been argued that as many as a 100 million women could be missing. The possibility of gender bias at birth and the mistreatment of young girls are widely regarded as key explanations. We provide a decomposition of these missing women by age and cause of death. While we do not dispute the existence of severe gender bias at young ages, our computations yield some striking new findings: (1) the vast majority of missing women in India and a significant proportion of those in China are of adult age; (2) as a proportion of the total female population, the number of missing women is largest in sub-Saharan Africa, and the absolute numbers are comparable to those for India and China; (3) almost all the missing women stem from disease-by-disease comparisons and not from the changing composition of disease, as described by the epidemiological transition. Finally, using historical data, we argue that a comparable proportion of women was missing at the start of the 20th century in the United States, just as they are in India, China, and sub-Saharan Africa today.
That is a very different interpretation from what one usually hears.
Assorted links
1. Markets in everything: the "Face time" facelift, and do elites excel at hypocrisy? Do they excel at sincerity too? What do they not excel at?
2. More bad economic news from India.
3. Can a crowd predict the outcome of a trial?
4. How effective are mandated disclaimers?
5. Was Schumpeter right about Bell Labs?
6. The educational plateau and stocks vs. flows.
Sentences to ponder
And then, finally, there's Peter Eavis's conspiracy theory: if the Greek bond exchange goes really smoothly, and the sun rises in the morning and Italian bond yields stay below 5%, then maybe that's the most worrying outcome of all. Because at that point Greece will have managed to wipe out, at a stroke, debt amounting to some 54% of GDP. You can see how Portugal and Ireland might be a little jealous. You don't want to make sovereign default too easy — not least because it would do extremely nasty things to European banks' balance sheets.
That is Felix Salmon, here is more, in recent times Felix has been the go-to guy for the Greece story: "…we're going through the largest sovereign default in the history of the world, and surprisingly few people — including senior European policymakers and journalists who are covering it professionally — really seem to understand what's going on."
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