Tyler Cowen's Blog, page 610
February 4, 2011
Iceland fact of the day
The total literature of Iceland is under 50,000 books, which is easily scannable in 2 years by 12 people using the scribe scanners of the Internet Archive.
Indeed they might put it all on-line. Hat tip goes to Annie Lowrey.
Assorted links
3. Why Norway deported the Norwegian of the Year.
4. How flu spreads among schoolchildren.
6. Leonhardt on Cowen vs. Meyerson; I view inequality as a residual of processes in the real economy. Some common factors are causing both inequality and stagnation (e.g, lack of major broad-based innovations, problems with the financial sector, aging), and to some extent inequality and stagnation have different causes. As Scott Sumner says: "do not reason from a price chane," I say: "do not reason from a distribution change." Changes in distribution are not autonomous causes of stagnation.
7. Romer gives details on Honduras.
Household size and stagnant median income
One loyal MR reader writes to me:
However, census Bureau data show that the size of the average US household decreased from 3.1 to 2.6 from 1970 to 2007...
The underlying question is whether figures for the median household are underrating the true growth in average living standards. A few points are in order.
1. Here is one passage from The Great Stagnation: "Since 1989, the size-adjusted and size -- unadjusted measures have been rising at roughly the same rate, and post-1979 the difference between the size-adjusted and the size-unadjusted median income measures is never more than 0.3 percent." For more on this, see Lawrence Mishel, Jared Bernstein, and Heidi Shierholz, The State of Working America 2008/2009, chapter one.
2. David Leonhardt writes: "In fact, households were shrinking more quickly in the 1960s, '70s and '80s than they are now — and incomes were growing." Read the rest of this post as well.
3. That households are smaller decreases the aid and assistance available to those living in them.
4. There are an increasing number of women in the labor force, and that factor biases the household number to be higher than true productivity growth alone would dictate. Unmeasured household production is a mix of "lower than it would have been" or more harried than it would have been. I suspect this is a large effect, not a small effect.
5. On the issue of students and retirees, see the adjustments performed by Lane Kenworthy, pp.37-38.
Overall I do not see that changing household size allows one to dismiss the notion of relatively stagnant median income.
February 3, 2011
Hernando de Soto on Egypt
• Egypt's underground economy was the nation's biggest employer. The legal private sector employed 6.8 million people and the public sector employed 5.9 million, while 9.6 million people worked in the extralegal sector.
• As far as real estate is concerned, 92% of Egyptians hold their property without normal legal title.
• We estimated the value of all these extralegal businesses and property, rural as well as urban, to be $248 billion—30 times greater than the market value of the companies registered on the Cairo Stock Exchange and 55 times greater than the value of foreign direct investment in Egypt since Napoleon invaded—including the financing of the Suez Canal and the Aswan Dam. (Those same extralegal assets would be worth more than $400 billion in today's dollars.)
My video dialogue with Nick Schulz
Find it here, and Nick's summary is very good:
In my conversation with Tyler about his new and much-debated book, The Great Stagnation, I was particularly struck by his explanation (at around 21:30) for how he came to embrace the idea that we are experiencing an innovation slowdown. His remarks about Julian Simon are also very noteworthy.
It would be an innovation for this blog if I could embed, but alas it is not to be!
Assorted links
1. China mega-city of the day.
2. Michael Mandel reviews TGS: he says buy not just one copy, but two.
3. Harold Meyerson of WaPo on TGS. And more from Brink.
4. "Sparks and Praise Fires: A Theory of Unanticipated Revolution."
5. Does behavioral economics undermine the welfare state?
7. Excellent 1990 New Yorker portrait of Mahfouz.
Dialogue with David Leonhardt
It's about how to spur innovation, read it here. Here is one excerpt:
I would also like to see more of our elite institutions of higher education take the explicitly meritocratic and indeed arguably anti-egalitarian approaches of Caltech and also University of Chicago. Those two institutions are big successes — M.I.T. too — yet they are not always so easy to copy. We should be trying harder. In terms of respect for intelligence, achievement, and science, we should be more like Singapore.
The question did not come up, but I also favor reduced liability standards for major new innovations. Take the various plans for robot-driven cars. They will kill some people, as do human-driven cars. We run the risk of having the status quo so locked into place, so grandfathered, and so implicitly favored by the realities of regulation and lawsuits, that such an idea might never get off the ground. That in turn affects the incentives of innovators ex ante.
Is a charter city coming to Honduras?
David Wessel reports:
Honduras is interested. Two weeks ago, with only one "no," its Congress voted to amend the constitution to allow for a ciudad modelo.
(No filibuster there!) And:
In early January, Mr. [Paul] Romer went to the capital, Tegucigalpa, to meet privately with various groups, then make his case at a public gathering. "You can't change the rules in the middle of the game," he said, flashing a photo of a soccer game on a screen. "Create a new playing field and see if anyone wants to play." Think big, he pleaded. Build an airport big enough to be a hemispheric hub, he said, turning to his father Roy, former governor of Colorado, to tell the story of how Denver got its big airport.
The evolution of regionalisms on Twitter
Postings on Twitter reflect some well-known regionalisms, such as Southerners' "y'all," and Pittsburghers' "yinz," and the usual regional divides in references to soda, pop and Coke. But Jacob Eisenstein, a post-doctoral fellow in CMU's Machine Learning Department, said the automated method he and his colleagues have developed for analyzing Twitter word use shows that regional dialects appear to be evolving within social media.
In northern California, something that's cool is "koo" in tweets, while in southern California, it's "coo." In many cities, something is "sumthin," but tweets in New York City favor "suttin." While many of us might complain in tweets of being "very" tired, people in northern California tend to be "hella" tired, New Yorkers "deadass" tired and Angelenos are simply tired "af."
The "af" is an acronym that, like many others on Twitter, stands for a vulgarity. LOL is a commonly used acronym for "laughing out loud," but Twitterers in Washington, D.C., seem to have an affinity for the cruder LLS.
That is from Science Daily, hat tip goes to LanguageHat and the original paper (pdf) is here.
Ireland fact of the day
A single bank, Anglo Irish, which, two years before, the Irish government had claimed was merely suffering from a "liquidity problem," faced losses of up to 34 billion euros. To get some sense of how "34 billion euros" sounds to Irish ears, an American thinking in dollars needs to multiply it by roughly one hundred: $3.4 trillion. And that was for a single bank.
That is from the new Michael Lewis piece on Ireland, hat tip to Daniel Lippman.
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