Tyler Cowen's Blog, page 77

A variety of media stocks may fall even further

…Google announced that 56.1% of ads served on the internet are never even “in view”—defined as being on screen for one second or more. That’s a huge number of “impressions” that cost money for advertisers, but are as pointless as a television playing to an empty room.

This is not a big revelation. The web metrics company ComScore reported last year that 46% of online ads are never seen. Spider.io, an ad fraud company acquired by Google in February, has pointed out that a large portion of ads are “viewed” only by robots, revealing that one botnet of 120,000 virus-infected computers viewed ads billions of times, running up the tab for advertisers without offering them the human eyeballs they sought.

There is more here, by Zach Wener-Fleiner, and for the pointer I thank a loyal MR reader.

Assorted links

1. Stephen L. Carter picks best books of the year.

2. $80 million Bitcoin transaction.

3.  Profile of me, in Dutch.  I took the guy to the local Yemeni restaurant.

4. In this problem of tax incidence theory, which is the more elastic factor of production?

5. Aubade, read by Philip Larkin.

6. China sends fresh water to the Maldives.

7. New results on the economics of the minimum wage.

That was then, this is now

Some of the White House economists were dubious and privately called Mrs. Clinton’s health care team “the Bolsheviks.” In return, according to Ms. Rivlin, the economists were “sometimes treated like the enemy.” Their suggested changes were ignored. “We could have beaten Ira alone,” said Mr. Blinder. “But we couldn’t beat Hillary.”

There is more here from the NYT, mostly about Hillary, not about that episode.

How Technology Might Someday Fight Income Inequality

That is the theme of my latest column for The Upshot.  In Average is Over I offered a few sentences toward the end about how in the longer run technology might restore greater income equality. or at least greater consumption equality.  I thought I should turn that point into a column, here is one excerpt:

Another set of future gains, especially for lesser-skilled workers, may come as computers become easier to handle for people with rudimentary skill. Not everyone can work fruitfully with computers now. There is a generation gap when it comes to manipulating electronic devices, and many relevant tasks require knowledge of programming or, more ambitiously, the entrepreneurial skill of creating a start-up. That, in a nutshell, is how our dynamic sector has concentrated its gains among a relatively small number of employees, thus leading to more income inequality.

This particular type of inequality may very well change. As the previous generation retires from the work force, many more people will have grown up with intimate knowledge of computers. And over time, it may become easier to work with computers just by talking to them. As computer-human interfaces become simpler and easier to manage, that may raise the relative return to less-skilled labor.

Here is more:

A final set of forces to reverse growing inequality stem from the emerging economies, most of all China. Perhaps we are living in a temporary intermediate period when America and many other developed nations bear a lot of the costs of Chinese economic development without yet getting many of the potential benefits. For instance, China and other emerging nations are already rich enough to bid up commodity prices and large enough to drive down the wages of a lot of American middle-class workers, especially in manufacturing. Yet while these emerging economies are keeping down the costs of manufactured goods for American consumers, they are not yet innovative enough to send us many fantastic new products, the way that the United States sends a stream of new products to British or French consumers, to their benefit.

That state of affairs will probably end. Over the next few decades, we can expect China, India and other emerging nations to supply more innovations to the global economy, including to the United States.

Do read the whole thing.

*The Student Loan Mess*, and implicit vs. explicit leverage in higher education

I reviewed this very good and very useful book by Eric and Joel Best in the 28 November issue of the Times Literary Supplement, not on-line.  Here is one excerpt from my review:

The second problem is that American higher education is much more indebted than it appears at first glance.  Most non-profit colleges and universities have only small amounts of explicit debt on their books, but there are many forms of implicit debt.  Many of those institutions made salary commitments to tenured faculty members, or promised donors they would continue various programmes, or they initiated or expanded sports teams and facilities, hoping to fund those plans with future tuition increases.  A slow economic recovery, sluggish entry-level wages in labour markets, recalcitrant state legislatures, and, yes, the student debt crisis will make those tuition increases very difficult to pull off.  This liquidity crunch is already under way and it has come first to the profit-making institutions and to stand-alone business and law schools, which will be closing and consolidating in great numbers.

I call it “probably the best and clearest book on the United States’ complex student debt problem.”  You can buy the book here.  Also buy the TLS issue, it is their best of the year, as it contains an especially fine “Best Books of the Year” list, you can stop worrying about TNR now.

Africa fact of the day

For now, the advance of democracy in Africa appears to have stalled. In 1990, just three of Africa’s 48 countries were electoral democracies, according to Freedom House, a Washington-based pro-democracy advocacy group. By 1994, that number had leapt to 18. Two decades later, only 19 qualify.

That is from Drew Hinshaw and Patrick McGroarty at The Wall Street Journal, the article is interesting throughout.

Assorted links

1. Vox goes Hansonian on the TNR story.

2. Smarter vs. stupider burglars.

3. Ragan Petrie with new results on gender competitiveness.

4. Interview with Michael Hofmann on poetry.

5. Who owns the intellectual property rights to CRISPR?

6. What happened to those who were predicted in the 1990s to be our future leaders?

7. Update on smart meters and dynamic pricing.

The Kuznets curve in India strikes back

Indian industries have often complained that convoluted environmental regulations are choking off economic growth. As a candidate, Mr. Modi promised to open the floodgates, and he has been true to his word. The new government is moving with remarkable speed to clear away regulatory burdens for industry, the armed forces, mining and power projects.

More permanent changes may be coming. In a report made public last week, a high-level committee assigned to rewrite India’s environmental laws assailed the existing regulatory system, saying it has “served only the purpose of a venal administration” seeking to extract bribes.

To speed up project approvals, the committee recommended scrapping a layer of government inspections; instead, it said, India should rely on business owners to voluntarily disclose the pollution that their projects will generate and then monitor their own compliance, an approach the committee described as “the concept of utmost good faith.”

That is from Ellen Barry and Neha Thirani Bagri.  I am a fan of Michael Greenstone’s work, but I did not find this recent piece on Indian pollution sufficiently penetrating.

A demographic warning sign for the United States

The number of women in the United States who gave birth dropped last year, according to federal statistics released Thursday, extending the decline for a sixth year.

The National Center for Health Statistics reported Thursday that there were 3.93 million births in the United States in 2013, down slightly from 3.95 million in 2012, but 9 percent below the high in 2007.

According to the report, the general fertility rate in the United States — the average number of babies women from 15 to 44 bear over their lifetime — dropped to a record low last year, to 1.86 babies, well below the 2.1 needed for a stable population. For every 1,000 women ages 15 to 44, there were 62.5 births in 2013, compared with 63 the previous year.

From Tamar Lewin, there is more here.  Here is Clive Crook on the importance of demography.

Assorted links

1. How some video stores are thriving.

2. Patrick Jory reviews the Andrew MacGregor Marshall book on Thailand.

3. The Economist picks best books of the year, a good list.

4. Chimpanzees are denied legal rights.

5. George Selgin and Bob Murphy on the 1920-21 recovery.  I say we still haven’t gotten to the bottom of this.  Here is Scott Sumner.  “Falling wages are good when needed,” is indeed a likely takeaway.

6. EconLOLcats.

7. Putting this month’s wage gain in context.