Brad DeLong

Brad DeLong: Worthy reads on equitable growth, August 10–16, 2018

<b>Worthy reads from Equitable Growth:</b>• An excellent contribution to Equitable Growth’s working paper series from Ioana Marinescu and Herbert Hovenkamp, …

Economics

Monday assorted links

1. Interview with philosopher Galen Strawson.2. “Rebellion is a determinate negation of the social order. Unruliness is its indeterminate negation.” …

Great Depression

Saturday assorted links

1. The spatial ability of a population in a given country is correlated with economic wealth.2. “The most famous work of Scandinavian Noir is Hamlet …

William Shakespeare

Brad DeLong: Worthy reads on equitable growth, August 3–9, 2018

Keynesian Economics

Sunday Morning Twitter: Functional Finance/A Better World Is Possible Tweeting...

A better world—a better twitter—is indeed possible...<b>Suresh Naidu</b>: I will stake my fancy economics job on this: Nothing in @Ocasio2018's policy …

Economics

Weekend reading: “all wages all the time” edition

<i>This is a weekly post we publish on Fridays with links to articles that touch on economic inequality and growth. The first section is a round-up of</i> …

Economics

<b>Aspen</b>: <i>Approaches to Fragility</i>: This started as a joke-of-the-moment, in response to talking about "fragile states" in which farmers fight with …

Academia

<b>Aspen</b>: <i>Approaches to Fragility</i>: One of the great mysteries puzzling me in my Visualization of the Cosmic All is the extraordinary disjunction between …

Keynesian Economics

I am being told that George Borjas still does not understand—or at least says he does not understand—the force of this critique. Can that possibly be true?: **Michael A. Clemens and Jennifer Hunt**: _[The Labor Market Effects of Refugee Waves: Reconciling Conflicting Results](http://papers.nber.org/tmp/78465-w23433.pdf)_: "The fraction of blacks is much higher in the post- than pre-Boatlift years in Borjas’s Miami sample... >...while there is no such difference in Card’s Miami sample... nor in the control cities favored by either Card or Borjas.... Reasons for the compositional change... the 1980 arrival of black Haitians with less than high school and improved survey coverage of low-wage black males.... Because both... had lower wages than other workers with less than high school, this compositional change tends to produce a spurious fall in average wages for workers with less than high school. Our reanalysis of Borjas’s sample with an adjustment for the share of blacks yields results similar to those of Card (1990) and Peri and Yasenov (2017): little to no wage impact of the Mariel Boatlift is discernable.... >Second, we show that the Borjas and Monras (2017) applications of instrumental variables... give[s] similar results to the original studies after a specification correction.... The instrument...

« | Main | Some Fairly-Recent Must- and Should-Reads... »<p>I am being told that George Borjas still does not understand—or at least says he does not …

Labor Economics

Web state tracking considered harmful: **Gertjan Franken**: _[Who Left Open the Cookie Jar?: A Comprehensive Evaluation of Third-Party Cookie Policies](https://wholeftopenthecookiejar.eu/static/tpc-paper.pdf)_: "Popular browsers include cookies in all requests, even when these are cross-site... >...Unfortunately, these third-party cookies enable both cross-site attacks and third-party tracking. As a response to these nefarious consequences, various countermeasures have been developed in the form of browser extensions or even protection mechanisms that are built directly into the browser. In this paper, we evaluate the effectiveness of these defense mechanisms by leveraging a framework that automatically evaluates the enforcement of the policies imposed to third-party requests. By applying our framework, which generates a comprehensive set of test cases covering various web mechanisms, we identify several flaws in the policy implementations of the 7 browsers and 46 browser extensions that were evaluated... ---- #shouldread #web

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Information Security

**Rory McVeigh, David Cunningham, and Justin Farrell**: _[Political Polarization as a Social Movement Outcome: 1960s Klan Activism and Its Enduring Impact on Political Realignment in Southern Counties, 1960 to 2000](https://pages.wustl.edu/files/pages/imce/cunningham/mcveigh_et_al_asr_2014_kkk_rep_voting_1.pdf)_: "Short-term movement influence on voting outcomes can endure when orientations toward the movement disrupt social ties, embedding individuals within new discussion networks... >...that reinforce new partisan loyalties. To demonstrate this dynamic, we employ longitudinal data to show that increases in Republican voting, across several different time intervals, were most pronounced in southern counties where the Ku Klux Klan had been active in the 1960s. In an individual-level analysis of voting intent, we show that decades after the Klan declined, racial attitudes map onto party voting among southern voters, but only in counties where the Klan had been active... ---- #shouldread

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Keynesian Economics

Globalization: Some Fairly-Recent Should- and Must-Reads

• <b>Marti Sandbu</b>: <i>EuroTragedy: A Drama in Nine Acts, by Ashoka Mody</i>: "Writing about the euro... doing justice to the technicalities threatens to kill any …

Economics

**Marti Sandbu**: _[EuroTragedy: A Drama in Nine Acts, by Ashoka Mody](https://www.ft.com/content/34f4dec6-9679-11e8-b747-fb1e803ee64e)_: "Writing about the euro... doing justice to the technicalities threatens to kill any narrative, while simplified storytelling risks misguided analysis. Ashoka Mody’s... is an ambitious attempt to avoid this trap... >....The sweeping chronology of the euro is well told. With evident passion.... He has such a good eye for what is economically important that his observations trump much of the conventional analysis he echoes. He shows that the roots of European economic underperformance and political disquiet have little to do with the fact of monetary union itself.... He highlights governance failures such as corruption and the extreme unwillingness of European governments to clean up and restructure their banking systems.... >Mody is on surer ground when he slams policymakers for inappropriate macroeconomic policy choices: excessive fiscal tightening and insufficiently loose monetary policy. And he nails the biggest policy error of them all: the insistence that euro member states could not default on their own debt, or allow their banks to default on senior bondholders. The most original parts of his book are the reasoned explanations of why debt restructuring of both sovereigns and banks should have been embraced early in...

« | Main | Some Fairly-Recent Must- and Should-Reads... »<p><b>Marti Sandbu</b>: <i>EuroTragedy: A Drama in Nine Acts, by Ashoka Mody</i>: "Writing about the euro... …

Economics

Event studies are very dangerous tools if you truly seek robust identification for policies that operate through expectational channels: **Joseph Gagnon**: _[QE Skeptics Overstate Their Case](https://piie.com/blogs/realtime-economic-issues-watch/qe-skeptics-overstate-their-case)_: "David Greenlaw, James Hamilton, Ethan Harris, and Kenneth West... argued that the consensus of previous studies overstates the effects of quantitative easing (QE) on long-term interest rates... >...conclude that (1) the lasting effect of QE1 was perhaps half as large as some prominent estimates, and (2) the effects of the remaining rounds of QE were either transient or negligible. Their paper relies on the "event study" methodology for measuring the effects of QE.... Arguably, the assumptions are not unreasonable for major news events concerning QE1, but they are clearly violated for subsequent rounds of QE... ---- #shouldread

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Interest Rates

**Kevin O'Rourke** (2013): _[Why economics needs economic history](https://voxeu.org/article/why-economics-needs-economic-history#.W2TUbGsUREY.twitter)_: "In a recent Humanitas Lecture in Oxford, Stan Fischer said that 'I think I’ve learned as much from studying the history of central banking as I have from knowing the theory of central banking and I advise all of you who want to be central bankers to read the history books'... >...Knowledge of economic and financial history... forces students to recognise that major discontinuities in economic performance and economic policy regimes have occurred many times... often coincided with economic and financial crises, which therefore cannot be assumed away as theoretically impossible. A historical training would immunise students from the complacency that characterised the “Great Moderation”.... Economic history teaches students the importance of context.... History is replete with examples of institutions which developed to solve the problems of one era, but which later became problems in their own right.... Economic history is an unapologetically empirical field, exclusively dedicated to understanding the real world... forces students to add to the technical rigor of their programs an extra dimension of rigor: asking whether their explanations for historical events actually fit the facts or not. Which emphatically does not mean cherry-picking selected facts that fit your...

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Economics

**Comment of the Day: Graydon**: "_[What you're seeing](http://www.bradford-delong.com/2018/08/a-brief-note-to-my-republican-friends-he-did-it-he-did-it-all-he-did-more-than-we-know.html?cid=6a00e551f080038834022ad360e547200c#comment-6a00e551f080038834022ad360e547200c)_ is an active ethnogenesis; Trump's base are recreating themselves as something that's not 'Americans'... >...because America (at least claims to) believe in something other than no free press, no rights for women, ethnic cleansing to establish a white ethnostate, and so on. It's near enough the Confederacy with an authoritarian central government. What tends to be forgotten is that the Union was an act of ethnogenesis, too; people had to make up a unitary power to explain to themselves why they were fighting. It's part of why promoting someone Lieutenant General was such a big deal; they had to change the founding myth. There's several attempted ethnogenesis efforts going on; there's a real sense in which the non-Trump political factions need to pick one and push it consciously... ---- #commentoftheday

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Ethnography

**Jamie Powell**: _[Who cares if Elon is incinerating capital?](https://ftalphaville.ft.com/2018/06/13/1528862400000/Who-cares-if-Elon-is-incinerating-capital-/)_: "The great American railways provide a helpful illustration... >...Its genesis, much like Britain's railways, was a period of investor mania and torched capital.... Here's a table of prices for various railroad shares over 1857.... We think it's fair to say holders of LaCrosse-Milwaukee stock were not best pleased with their 1857 returns.... Yet as Chandler notes, the railroads eventually ended up transforming America.... Arguably the “killer application” of the railroads, the mail order catalog of Sears-Roebuck, didn't arrive until the end of the century, as economist Brad DeLong has argued. In any event, it demonstrates that spurious financing, with no clear expected value, can produce value which outlives the inevitable losses of its initial financial backers. >The role of the state was also crucial to the railroads' success—perhaps even more so than the current set of regional green incentives for Tesla and other businesses today.... Parallels between 1850's railway mania and Musk's fiefdom (and with it, the wider green revolution) may seem tenuous to our readers. After all, a modern economy is pretty much unimaginable without rail infrastructure while we could probably do without $500 a pop Boring Company flamethrowers. However,...

...Its genesis, much like Britain's railways, was a period of investor mania and torched capital.... Here's a table of prices for various railroad …

Keynesian Economics

**Robert C. Allen, Jean-Pascal Bassino, Debin Ma, Christine Moll-Murata, and Jan Luiten van Zanden** (2005): _[Wages, Prices, and Living Standards in China, Japan, and Europe, 1738-1925](https://www.nuffield.ox.ac.uk/users/allen/unpublished/group-1.pdf)_: "'The difference between the money price of labour in China and Europe is still greater than that between the money price of subsistence; because the real recompence of labour is higher in Europe than in China.' –Adam Smith, Wealth of Nations, 1776, p. 189... >...The comparative standard of living of Asians and Europeans on the eve of the Industrial Revolution has become a controversial question in economic history. The classical economists and many modern scholars have claimed that European living standards exceeded those in Asia long before the Industrial Revolution. Recently, this consensus has been questioned by revisionists (e.g. Pomeranz 2000, Parthasarathai 1998, Wong 1997, Lee and Feng 1999, Li 1998, Allen 2002, 2003, 2004, Allen, Bengtsson, and Dribe 2005) who have suggested that Asian living standards were on a par with those of Europe in the eighteenth century and who have disputed the demographic and agrarian assumptions that underpin the traditional view. The revisionists have not convinced everyone, however (e.g. Broadberry and Gupta 2005). >One thing is clear about this debate, however, and...

<b>Robert C. Allen, Jean-Pascal Bassino, Debin Ma, Christine Moll-Murata, and Jan Luiten van Zanden</b> (2005): <i>Wages, Prices, and Living Standards in China,</i> …

Economics

We economists spend a lot of time looking at aggregates and averages—Trevon Logan likes to quote Robert Fogel on how counting is our secret game-changing analytical technique. But it is as important to get thick description of what happens to individual people's lives, so that you know what your aggregate and average numbers mean: **Blythe George**: _[“Them old guys... they knew what to do”: Examining the impact of industry collapse on two tribal reservations](https://equitablegrowth.org/working-papers/industry-collapse-tribal-reservations/)_: "Using 46 in-depth interviews conducted on the Yurok and Hoopa Valley reservations... >...I answer the following research questions: is there an empirical basis for asserting a relationship between the decline of the logging industry and weakening of male labor force attachment, and for relating these economic shifts to changes in attitudes, expectations and behavior, including methamphetamine use since 1985? Using a cohort model, I describe the changes in male labor force attachment following the decline of the logging industry, as well changes in personal behavior, especially methamphetamine use from 1985 to present. These findings support existing theories of weak labor force attachment as a result of industry decline... ---- #shouldread

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Keynesian Economics

**Kevin Drum**: "_[I’ve been blogging for 15 years,](http://www.bradford-delong.com/2018/07/4-kevin-drum-_we-need-to-figure-out-how-to-fight-weaponized-disinformation-mother-joneshttpswwwmotherjonesc.html?cid=6a00e551f080038834022ad35da7cd200c#comment-6a00e551f080038834022ad35da7cd200c)_ and there’s never been a day when I wanted to stop... ...Atrios likes to remind us that George Bush was a worse president than Trump. Technically, that’s true: he launched a stupid war that killed thousands of people and probably prevented us from winning the war in Afghanistan that we really needed to win. Trump hasn’t done that yet—though he might, given time. But there’s more to a president than that. There’s also the content of his character. I will never let Bush off the hook for approving the torture of enemy combatants, but at least he had the excuse of doing it right after 9/11 and the decency to be sort of embarrassed about it (thus the euphemisms). Trump, by contrast, considers it “strong” to loudly and proudly support torture—and the worse the better. Bush also wasn’t racist... >This makes Trump far worse to take on a daily basis. It’s one thing to understand that writing an analytic blog doesn’t really have much chance of changing things, but it’s another to live with a president who has simply made facts irrelevant. What’s the point of refuting lies that everyone knows are...

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Kevin Drum

Mark Thoma sends us to: **P.J. Glandon, Ken Kuttner, Sandeep Mazumder, and Caleb Stroup**: _[Macroeconomic Research, Present and Past](http://economistsview.typepad.com/economistsview/2018/08/macroeconomic-research-present-and-past.html)_: "Macroeconomics journals have published an increasing share of theory papers over the past 38 years, with theory-based papers now comprising the majority of published macroeconomics research... >...The increase in quantitative models (e.g., DSGE methods) masks a decline in publication of pure theory research. Financial intermediation played an important role in about a third of macroeconomic theory papers in the 1980s and 1990s, but became less frequent until the financial crisis, at which point it once again became an important area of focus. Only a quarter of macroeconomics publications conduct falsification exercises. This finding contrasts with the year 1980, when these empirical approaches dominated macroeconomics publishing. Yet the fraction of empirical papers that rely on microdata or proprietary data has increased dramatically over the past decade, with these features now appearing in the majority of published empirical papers. All of these findings vary dramatically across individual macroeconomics field journals... ---- #shouldread

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Economics

**Caroline Roullier, Laure Benoit, Doyle B. McKey, and Vincent Lebot**: _[Historical collections reveal patterns of diffusion of sweet potato in Oceania obscured by modern plant movements and recombination](http://www.pnas.org/content/110/6/2205)_: "The history of sweet potato in the Pacific has long been an enigma... >...Archaeological, linguistic, and ethnobotanical data suggest that prehistoric human-mediated dispersal events contributed to the distribution in Oceania of this American domesticate. According to the “tripartite hypothesis,” sweet potato was introduced into Oceania from South America in pre-Columbian times and was then later newly introduced, and diffused widely across the Pacific, by Europeans via two historically documented routes from Mexico and the Caribbean. Although sweet potato is the most convincing example of putative pre-Columbian connections between human occupants of Polynesia and South America, the search for genetic evidence of pre-Columbian dispersal of sweet potato into Oceania has been inconclusive. Our study attempts to fill this gap. Using complementary sets of markers (chloroplast and nuclear microsatellites) and both modern and herbarium samples, we test the tripartite hypothesis. Our results provide strong support for prehistoric transfer(s) of sweet potato from South America (Peru-Ecuador region) into Polynesia. Our results also document a temporal shift in the pattern of distribution of genetic variation in...

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Anthropology

I am swinging toward thinking that disequilibrium foundations of equilibrium economics is the only useful macro theory standing: **Seppo Honkapohja and Kaushik Mitra**: [Price Level Targeting with Evolving Credibility](https://helda.helsinki.fi/bof/bitstream/handle/123456789/15215/BoF_DP_1805.pdf1): "We examine global dynamics under learning in a nonlinear New Keynesian model when monetary policy uses price-level targeting and compare it to inflation targeting... >...Domain of attraction of the targeted steady state gives a robustness criterion for policy regimes. Robustness of price-level targeting depends on whether a known target path is incorporated into learning. Credibility is measured by accuracy of this forecasting method relative to simple statistical forecasts. Credibility evolves through reinforcement learning. Initial credibility and initial level of target price are key factors influencing performance. Results match the Swedish experience of price level stabilization in 1920s and 30s... ---- #shouldread

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Keynesian Economics

Sharply distinguishing "ideology" from "partisanship" seems to me to be a potentially fatal flaw in what is otherwise an absolutely brilliant essay. We East African Plains Apes think in groups: we outsource a great deal of what we believe to others whom we trust. Thus "partisanship" and "ideology" reinforce each other massively. But that also means that when thought-leader elites change what the partisans with access to audiences say, people's "ideologies" will change as well—without the thinking about it much, if it all: **Nathan P. Kalmoe**: _[Uses & Abuses of Ideology](https://www.dropbox.com/s/44mxanekaxxcj6k/Kalmoe%20ISPP%202018%20-%20Uses%20%26%20Abuses%20of%20Ideology.pdf?dl=0)_: "Ideology is a central construct in political psychology, and researchers claim large majorities of the public are ideological, but most fail to grapple with evidence of ideological innocence in most citizens... >...Here, I show these ideological limits with several popular measures—self-identification, core political values (egalitarian & traditional), and policy indices—in representative U.S. surveys across five decades (N~13k-37k), including panel data for evaluating stability. In stratified tests, only the most knowledgeable 20-30% of citizens carry substantive, coherent, stable, and potent ideological orientations. In other words, political sophistication is necessary for predispositions to actualize as ideology. Moreover, ideology’s power is confounded—largely due to partisan identity instead, and I show that ubiquitous...

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Political Science

**Comment of the Day: Robert Waldmann**: _[Cognitive Science, Behavioral Economics, and Finance: Some Fairly-Recent Must- and Should-Reads](http://www.bradford-delong.com/2018/07/cognitive-science-behavioral-economics-and-finance-some-fairly-recent-must-and-should-reads.html?cid=6a00e551f080038834022ad38492a3200d#comment-6a00e551f080038834022ad38492a3200d)_: "On Cosma. I must read Judea Pearl. My reply to Shalizi is that we can and do have priors to within some number in the total variation norm... >...the probability is between p and p+10%, say. That's enough that Bayes's formula is useful. That's not so much that we must claim to have absolute confidence in very precise subjective probabilities. There is positive breakdown point sort of Bayesian reasoning closely related to positive breakdown point parameter estimation (the breakdown point is the proportion A of data such that I can trick you into believing anything if I can replace fraction A of observations with something I myscheviously make up)... ---- #commentoftheday

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Critical Thinking

The Good 2016 Election Map

Today is yet another day when I wish the <i>New York Times</i> would simply hang it up and go home, and let the money spent on it be spent on real …

Keynesian Economics

**Tim Duy**: _[Powell Wants to Create Some Mystery Around Fed Meetings](https://www.bloomberg.com/view/articles/2018-07-18/powell-wants-to-create-some-mystery-around-fed-meetings)_: "A slower or faster pace of rate hikes, an extended pause, or even a cut are all possibilities at this point... >...The Fed is preparing for a shift in their policy guidance. Why prepare for a shift? Policy rates will soon approach the central tendency range of what policy makers estimate to be neutral, currently 2.8 percent to 3.0 percent. But that range is just an estimate. The true neutral rate is unobservable. Hence, as rates approach that range, policy makers need to more carefully assess the current and expected state of the economy before blindly pushing rates higher. They could afford to be on autopilot when rates were far from neutral; they will soon no longer have that luxury. >My view is that the next two rates hikes are looking like a near certainty at this point. The economy exhibits too little inflation to consider accelerating the pace of rate hikes with an August hike and retains too much momentum for the Fed to consider pausing at the September meeting. Moreover, I doubt this calculus will change by fourth quarter, meaning a hike in December but not October....

<b>The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and</b> …

Economics

A Socratic Inventory, by Bryan Caplan

Since joining EconLog, I’ve written a pile of Socratic dialogues. In case you’ve missed a few, here’s a full inventory.• How Markets Value the Welfare …

Philosophy

Brad DeLong: Worthy reads on equitable growth, July 20–26, 2018

<b>Worthy reads on Equitable Growth:</b>• We economists spend a lot of time looking at aggregates and averages. But it is equally important to get thick …

Economics

Wednesday assorted links

1. “We are trying to obtain time-sensitive information on teams and technologies that no one else seems to think important.”2. “In general, Gilman …

Keynesian Economics