Tyler Cowen's Blog, page 80
December 1, 2014
Assorted links
I have two students on the job market this year
Lotta Moberg, who does international, development, and macro, with a current focus on Special Economic Zones, and
Alexander Schibuola, who does macro, money, and capital theory.
I recommend them both very highly. Of course I have more to say about them than that, so if you are interested either email me or request their letters of recommendation through normal channels.
The Future of US Economic Growth
Cato is holding a conference this Thursday (Dec. 4) on The Future of US Economic Growth. Speakers include Nobelist Edmund Phelps, Ed Glaeser, Dale Jorgenson, John Haltiwanger and Erik Brynjolfsson. I will speak in the afternoon on the topic of entrepreneurship and whether economic dynamism is in decline. I will have some surprising things to say about dynamism and regulation. More information at the link.
November 30, 2014
“The Superiority of Economists”
That is the title of a new paper (pdf) by Marion Fourcade, Etienne Ollion, and Yann Algan, here is the abstract:
In this essay, we investigate the dominant position of economics within the network of the social sciences in the United States. We begin by documenting the relative insularity of economics, using bibliometric data. Next we analyze the tight management of the field from the top down, which gives economics its characteristic hierarchical structure. Economists also distinguish themselves from other social scientists through their much better material situation (many teach in business schools, have external consulting activities), their more individualist worldviews, and in the confidence they have in their discipline’s ability to fix the world’s problems. Taken together, these traits constitute what we call the superiority of economists, where economists’ objective supremacy is intimately linked with their subjective sense of authority and entitlement. While this superiority has certainly fueled economists’ practical involvement and their considerable influence over the economy, it has also exposed them to more conflicts of interest, political critique, even derision.
The paper has interesting bits throughout, such as:
…the top five sociology departments now [total] 35.4 percent in the American Journal of Sociology, but 45.4 percent in the Journal of Political Economy, and a sky-high 57.6 percent in the Quarterly Journal of Economics.
The section on the rise of finance starts on p.18, worth a read. And here Paul Krugman adds extensive and very interesting comments. My view is that economists are in fact the smartest of the social scientists (on average), but this also has led economics to degenerate somewhat into a game of signaling smarts, to the detriment of breadth and knowledge of facts about the world.
For the pointers I thank Gabriel Zucman and Claudia Sahm, who comments as well.
Oil price increases and decreases seem to have asymmetric effects
From an interesting 2003 review article by Jones, Leiby, and Paik (pdf):
The energy economics literature has noted the asymmetric responses of petroleum product prices to price changes for well over a decade, as observed by Balke, Brown, and Yücel (1998) in a review of previous studies. Product prices rise more quickly in response to crude price increases than they decline in response to crude price reductions. Using weekly data on crude prices and a variety of spot and whole gasoline prices, BBY (1998) find considerable support for asymmetry in the time pattern of downstream price changes to changes in upstream prices, although they find that different specifications of asymmetry yield different results.
Applied to the crude-product relationship, asymmetry has a different meaning than it does in the oil price-GDP relationship. In the crude-product relationship, the asymmetry is in the speed of the response, while in the oil price-GDP relationship, it is in the magnitude of the response. Competition will ensure that the magnitudes of the response of product prices to crude price changes are eventually equal. Otherwise profits in refining and distribution would grow without bound.
Here is a JSTOR link to a somewhat later Balke, Brown, and Yücel paper. Here is their 2008 paper (pdf) on why the oil price/gdp link has weakened in the United States. Here is a related 2010 paper (pdf). Here is a recent James Hamilton blog post on oil gluts. Here is Scott: “Focus on Q, not P.”
Is SMS a form of net non-neutrality?
People have wondered how an Internet without net neutrality would work. Net neutrality is more than just a debate, it’s not a hypothetical, and it’s real and alive today with SMS.
It is currently hypothetical that on an Internet without net neutrality, companies would need to “pay to play” and live by arbitrary, ISP-devised rules for accessing consumers who want and pay for their services. This is the so-called “fast lane.” While ISPs argue this is about network utilization and bandwidth costs, businesses worry that it’s far beyond that.
At stake is access to consumers, and ISPs monetizing their subscriber bases instead of providing the open pipe consumers pay for. While some companies think it’s just a problem for Netflix or other high-bandwidth applications like streaming video, it’s not. The very real potential is that if you don’t have the right relationships, abide by arbitrary rules or pay appropriately, your company doesn’t get slow access – it gets no access. We know because this is how SMS in the U.S. works today.
That is from Jeff Lawson, there is more here. Here is Steven Pearlstein’s column on net neutrality.
Assorted links
1. Driving the Haiti-D.R. border in only five days.
2. Spectator books of the year lists. And Guardian writers pick best books of 2014.
3. Concussion lawsuits now start to hit high schools.
4. “The Hoxbys even had a decibel meter in their home to measure the racket…” I am genuinely pleased to see leading economists active in the war against noise pollution.
5. The Birds [The Ducks], Newfoundland style.
6. And what might you find in a New Zealand shed?
GiveDirectly
Consider GiveDirectly this holiday season for your charitable giving. As you may recall, GiveDirectly was started by four economists and it gives money directly to the very poor in Kenya and Uganda. GiveDirectly is a top-rated charity by GiveWell. The founders are committed to providing independent, randomized controlled trials of its process. One RCT has already been conducted with positive results and 3 others are under way. GiveDirectly publicizes the trials of its process before the results are produced. Impressive–the drug companies had to be forced to do this. Check out their website, they even provides real-time performance data. Here’s a bit more on their process.
November 29, 2014
What should a Bayesian infer from the Antikythera Mechanism?
That is the early “computer,” remember?:
Who made the famed Antikythera Mechanism, the astronomical calculator that was raised from an ancient shipwreck near Crete in 1901?
The complex clocklike assembly of bronze gears and display dials predates other known examples of similar technology by more than 1,000 years. It accurately predicted lunar and solar eclipses, as well as solar, lunar and planetary positions.
For good measure, the mechanism also tracked the dates of the Olympic Games. Although it was not programmable in the modern sense, some have called it the first analog computer.
We now learn that the calendar of this mysterious device begins in 205 B.C. The key point, in my view, is that we have discovered no other comparable machine from antiquity or any other era other than modern times. It took us until 2006 to even understand what the device was supposed to do, using advanced tomography, and we had been holding it since 1901.
So what to infer? The first option is that this device was a true outlier, standing sui generis above its time. Cardiff University professor Michael Edmunds “described the device as “just extraordinary, the only thing of its kind””.
As an artifact that is true, but is that so likely in terms of broader history? It is pure luck that we fished this thing out of the Mediterranean in 1901. (By the way, further dives are planned to search for more parts of it.) The alternative possibility is that antiquity had many more such exotic devices, which have remained unreported, at least in the manuscripts which have come down to us. That would imply, essentially, that we don’t have a very good idea of what antiquity was like. In my view that is the more rational Bayesian conclusion. It is more likely than thinking that we just lucked out to find this one unique, incredible device. To put it another way, if you found some organic life on a traveling comet, you ought to conclude there is more of that life, or something related, somewhere else.
And to me, the Antikythera Mechanism does not to me sound like a “lone genius” kind of device: “The gear teeth were in the form of equilateral triangles with an average circular pitch of 1.6 mm, an average wheel thickness of 1.4 mm and an average air gap between gears of 1.2 mm.” (Wikipedia) That suggests it was made by some kind of regular industrial process. It also had some sophistications which modern Swiss watches do not.
Given this Bayesian conclusions, which other strange claims stand a decent chance of being true of antquity? Which other surprises await us?
I find this an interesting passage: “the mysterious device was already pretty ancient by the time it went down some time around 85BC to 60BC with a ship carrying a bride and her dowry, io9 reports…” You don’t find a lot of people carrying around a lot of ancient PCs today, so might there have been an Antikythera Great Stagnation way back when? I think maybe so.
Here is a Lego model of the device. Here is an introductory YouTube video. Here is Wikipedia on the Antikythera Mechanism, a very good entry.
I owe thanks to Vic Sarjoo for pointers and Robin Hanson for a useful conversation on this topic.
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