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Well put: "If people are saving in anticipation of higher future taxes, then presumably they are depositing money with banks, which they can then lend on. And if they’re saving, then they don’t want to borrow.
You can believe in Ricardian crowding out. You can believe in financial crowding out. But you can’t believe in both, as one offsets the other." -
Should we spend more on improving statistical capacity in developing countries?
"This is Steve. Steve works in a statistics office, earning less than £90 a day. Steve works on assessing poverty indicators and informing policy makers of the appropriate data, but has no computer. His office is dangerously understaffed (one out of every two government statisticians is poached by development partners every year). Please, when you're deciding where to send your check this Christmas, think of Steve."
links for 2010-03-08
09-Mar-10
links for 2010-03-05
06-Mar-10
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If only anyone could have seen this coming!
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"HOAs are basically nonprofit associations that homeowners form to maintain their development’s common areas, with a bottom-line mandate to protect their property values. Each homeowner pays a monthly “assessment,” or fee, to finance common expenses, like maintenance of the landscaping, repairing of walks and roads, and keeping pools swimmable. Fees are also supposed to fund a reserve of money to take care of big jobs, such as reroofing, that might come up. Even though each owner has a deed to his/her home, they agree to a set of rules that restrict their independence — including a recognition of the HOA board’s right to foreclose on your home, just for not keeping up with the monthly HOA assessments …"
links for 2010-03-03
04-Mar-10
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It says a lot about the psychological sway of car culture that Kit Malthouse (and he's not the only one) sees fit to complain about a London Cycle Hire docking point being built on a 'quiet' residential street in Westminster, but not about the dozens of cars which are habitually parked there and which each make far more noise.
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"But a more pertinent question might be to ask just how much credit really is due Chicago-school economics for Chile's current relative prosperity? Mining alone accounts for 20 percent of Chile's GDP, and it is very much worth noting that the country's crown jewel, the copper industry, is completely dominated by one state-owned company, Codelco. Ponder that, for a second: Latin America's poster child for Chicago school economics features state control of the single most important economic resource. Huh."
links for 2010-02-28
01-Mar-10
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Sweet:
"Flexible labor markets require geographically mobile workers to be efficient. Otherwise, firms can take advantage of the immobility of workers and extract monopsony rents. In cultures with strong family ties, moving away from home is costly. Thus, individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of firms, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. There are also positive cross-country correlations between the strength of family ties and labor market rigidities. Finally, we find positive correlations between labor market rigidities at the beginning of the twenty first century and family values prevailing before World War II, which suggests that labor market regulations have deep cultural roots."
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"Consider: According to various reports, 19 deaths have been associated with Toyota’s gas pedal problem over the past decade. But over the same decade, a total of 21,110 people have been killed in Toyota vehicles, with an additional 1,261 killed in Lexus cars (based on analyzing 1999-2008 fatality data from National Highway Traffic Safety Administration). Almost none of these deaths had anything to do with technology, faulty or otherwise. Almost all of them were the result of driver behavior."
Sometimes I think we should just accept that humans have decisively proven they shouldn't be allowed drive cars. Tom Vanderbilt has a somewhat more considered take.
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Nice life-sustaining ocean you've got there. Would be a shame if something happened to it.
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"Sometimes I want to say that something about mass transit drives conservatives batty. Other times I want to say that the conservative discourse about mass transit simply illustrates the fact that it’s an ideology driven by inchoate resentments rather than any ideas about policy or the role of government."
Both of those things seem to be true, at least in the US. I think we're going to see more of the 'inchoate resentment' style of conservative rhetoric in the UK too, particularly when it comes to climate change.
links for 2010-02-26
27-Feb-10
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MattY: "I take this as saying that Hayek would support a universal health care system but would prefer it to be financed with a flat or regressive tax base."
links for 2010-02-25
26-Feb-10
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"The human brain is a big believer in equality—and a team of scientists from the California Institute of Technology (Caltech) and Trinity College in Dublin, Ireland, has become the first to gather the images to prove it.
Specifically, the team found that the reward centers in the human brain respond more strongly when a poor person receives a financial reward than when a rich person does. The surprising thing? This activity pattern holds true even if the brain being looked at is in the rich person's head, rather than the poor person's."
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"Small-government types don’t like to be accused of being uncaring or lacking empathy. But I think it’s striking how common it is to find a high-profile conservative politician who’s against federal activism for everything except some one cause that’s afflicted his or her own family. In most cases, this isn’t selfish—the Palins will be fine no matter what happens with IDEA. But she recognizes that some families with special needs kids aren’t as fortunate as she is and she empathizes and sympathizes with their plight. Other people with other problems she’s just indifferent to."
links for 2010-02-23
24-Feb-10
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"CBO estimates that in the fourth quarter of calendar year 2009, ARRA added between 1.0 million and 2.1 million to the number of workers employed in the United States, and it increased the number of full-time-equivalent (FTE) jobs by between 1.4 million and 3.0 million. Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers. CBO also estimates that real (inflation-adjusted) gross domestic product (GDP) was 1.5 percent to 3.5 percent higher in the fourth quarter than would have been the case in the absence of ARRA."
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Fascinating stuff as Jo'burg's new BRT system meets fury from both NIMBYists in the suburbs (who say buses will cause congestion and 'damage property values' but apparently don't mind vast numbers of cars) and, more unusually, the gangs that control the current private minibus industry:
"The city’s first challenge was to win over the formidable minibus taxi industry, which moves 14 million people daily in a nation of 49 million, far more than the bus and rail systems combined. It is perhaps the country’s greatest success story of black entrepreneurship, though with a history of ruthless violence. Experts estimate that hundreds, if not thousands, of people have died in “taxi wars” to control routes."
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Would be remarkable if it is inequality that finally undermines the Chinese state …
"The rich have got a lot richer in China during the financial crisis. This has fueled strong resentment among ordinary Chinese, who feel official nepotism and corruption is making some people extremely rich."
links for 2010-02-22
23-Feb-10
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Great news. Also note that local businesses initially opposed the pedestrianisation of Times and Herald Squares but are now overwhelmingly supportive.
links for 2010-02-21
22-Feb-10
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Robert Carson Allen:
"A Farewell to Alms advances striking claims about the economic history of the world. These include (1) the preindustrial world was in a Malthusian preventive check equilibrium, (2) living standards were unchanging and above subsistence for the last 100,000 years, (3) bad institutions were not the cause of economic backwardness, (4) successful economic growth was due to the spread of "middle class" values from the elite to the rest of society for "biological" reasons, (5) workers were the big gainers in the British Industrial Revolution, and (6) the absence of middle class values, for biological reasons, explains why most of the world is poor. The empirical support for these claims is examined, and all are questionable."
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I'd have liked a bit more discussion of why wages were higher in England, but this is good stuff. Robert Carson Allen:
"This paper uses the adoption and invention of the spinning jenny as a test case to understand why the industrial revolution occurred in Britain in the eighteenth century rather than in France or India. It is shown that wages were much higher relative to capital prices in Britain than in other countries. Calculation of the profitability of adopting the spinning jenny shows that it was profitable in Britain but not in France or in India. Since the jenny was profitable to use only in Britain, it was only in Britain that it was worth incurring the costs necessary to develop it. That is why the jenny was invented in Britain but not elsewhere. Irrespective of the quality of their institutions or the progressiveness of their cultures, neither the French nor the Indians would have found it profitable to mechanize cotton production in the eighteenth century."
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Oliver Bullough talks about his new book on the hidden history of the Caucasus. Sounds fascinating.
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Yglesias reports some findings from Kinder & Kam’s US Against Them: Ethnocentric Foundations of American Opinion:
"if you restrict your attention to white Americans then ethnocentric views (both in terms of positive views of whites and negative views of non-whites) is correlated with hostility to means-tested welfare programs. The relationship remains statistically significant even when you control for partisanship and for self-described political beliefs regarding egalitarianism and limited government.
But if you look at views on social insurance programs—Social Security and Medicare—you get the reverse result. Ethnocentrism is associated with support for increases in Social Security and Medicare spending, again even when you control for partisanship and self-described political beliefs regarding egalitarianism and limited government. And what seems to matter here isn’t dislike for non-whites, but positive solidaristic feelings about other white people."
Back
20-Feb-10
To anyone still reading this blog, sorry for going offline for about two months there. It’s a sign of how old this blog is and how clueless I am about tech matters that it is still hosted on my friend Pat’s server, so when something goes wrong it takes one or both of us to get round to fixing it, which sometimes isn’t the biggest priority.
If you are upset at having missed my Delicious links for the last couple of months you can find them all here. Posting is likely to be light for some time yet, as I’m busy with other things, including a macroeconomics course which is doing my head in (Real Business Cycle theory? Really?).
links for 2010-02-18
19-Feb-10
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That should be a six *month* high, you dolts (specifically, James Quinn, US Business Editor) - but who's counting?
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And John Stossel is very stupid.
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Lots of evidence supportive of a large, positive effect on the economy of the Obama stimulus.
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Oh look, even the American Enterprise Institute thinks that the stimulus had a big impact.
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Not noticeably, no.
links for 2009-12-21
22-Dec-09
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An an analysis of Liverpool's catastrophic season so far. I agree with the lot of it, especially the line "This season has been a confluence of kicks to the crotch, to say the least".
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I think Matt is probably correct when he says "The idea of some kind of categorical “climate debt” rather than a general moral obligation to do good short circuits the part where you think about the consequences of your actions."
Unless we can identify the exact people who have most benefitted and who will most suffer from accumulated carbon emissions, and arrange some transfers between them, then 'climate debt' should be a moral imperative for action rather than a justification for government to government transfers in particular. There is a case for government to government transfers, but it isn't this one and it does have to take account of political and operational realities.
links for 2009-12-20
21-Dec-09
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For some reason, a lot of people seem to want to personally blame Barack Obama for the outcome of COP15, but it sounds like China and India should get some of the stick too:
"a new fight then erupted in which China bizarrely insisted that Europe lower its targets for greenhouse gas emissions.
Merkel wanted to set a target for developed nations to cut emissions by 80% by 2050, but in the last gasp, China declared this unacceptable. This astonished many of those present: China was telling rich nations to rein back on their long-term commitment. The assumed reason was that China will have joined their ranks by 2050 and does not want to meet such a target …
Due to the leaks, hold-ups and suspicion, China barely budged and the EU refused to raise it sights… European commission president José Manuel Barroso said not one country asked the EU to move up to the higher figure, but counterparts had pulled down EU proposals to set a target for 2050."
Read the whole piece, it's excellent.
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"Carbon dioxide emissions may create significant social harm because of global warming, yet American urban development tends to be in low density areas with very hot summers. In this paper, we attempt to quantify the carbon dioxide emissions associated with new construction in different locations across the country. We look at emissions from driving, public transit, home heating, and household electricity usage. We find that the lowest emissions areas are generally in California and that the highest emissions areas are in Texas and Oklahoma. There is a strong negative association between emissions and land use regulations. By restricting new development, the cleanest areas of the country would seem to be pushing new development towards places with higher emissions. Cities generally have significantly lower emissions than suburban areas, and the city-suburb gap is particularly large in older areas, like New York."
links for 2009-12-17
18-Dec-09
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I haven't read Superfreakonomics, so when I saw the following passage apparently taken from the book I was somewhat taken aback:
"So as you leave your friend’s party, the decision should be clear: driving is safer than walking. (It would be even safer, obviously , to drink less, or to call a cab.) The next time you put away four glasses of wine at a party, maybe you’ll think through your decision a bit differently. Or, if you’re too far gone, maybe your friend will help sort things out. Because friends don’t let friends walk drunk."
Even if their figures on the dangers to oneself of 'drunk walking' are correct, and apparently they are not, the moral vacuity on display here is appalling. Something has gone badly wrong inside Steve Levitt's head.
links for 2009-12-15
16-Dec-09
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Sigh. Alex Tabarrok not only doesn't understand why this is an exceedingly stupid idea, he presumes that his commenters will dislike it for the wrong reason and then doesn't notice when they try to inform him of his mistake.
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Owen Barder: "I believe aid could and should work much better. Living in a developing country, I see all kinds of waste and inefficiency in the aid system that makes me angry. But it makes me angry because I also see how much difference aid makes when it is used well. I would like to see aid becoming much more transparent and accountable, so that it becomes subject to evolutionary pressures to improve.
This means, by the way, that I do not subscribe to the view that the aid system should be regarded as temporary. In the UK we hope that people will be on unemployment benefit temporarily before they are able to get back to work, but we don’t expect the system as a whole to come to an end. So I think that we should expect that at least for our lifetimes, it will be right and necessary that we transfer income from the richest people in the world to the poorest people in the world."
links for 2009-12-14
15-Dec-09
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"If aid saves the lives of millions of poor infants, or mothers in childbirth, at roughly the same rate a country can industrialize, then we’ll see an increase in the number of poor people at about the same rate that we increase GDP per person. Unless aid is also spurring faster industrial growth, the growth figures essentially won’t change. The things that aid does well–increasing primary education, saving lives, and leading to a demographic transition (essentially lower population growth–may reasonably take a generation or two to impact industry.
So if aid has been good at saving lives now, but not (in the short term) at spurring industry, then we shouldn’t be surprised that we don’t see take-offs. Rather, in most countries aid might actually lower the short term, measured number."
Galbraith said something similar some time back IIRC
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"findings show that increased government grants to charities do not deter greater individual giving. Interestingly, researchers also found no evidence that private individuals reacted to stagnating government aid to developing countries in the 1980s and 1990s by giving more themselves. Nor is there any evidence that individuals have donated less since the sharp rise in government aid since the late 1990s. Indeed, a new model developed by researchers to explain donation trends suggests that a 10 per cent change in household incomes produces about a 10 per cent change in donations, holding other factors constant."
I blogged about similar findings previously: http://blog.ctrlbreak.co.uk/?p=386
links for 2009-12-11
12-Dec-09
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What a stupid idea. Free parking = more congestion, more pollution, more illegal parking when people turn up expecting to be able to park and find that they can't, etc.
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"Study leader Dr Chris Grundy, a lecturer at the London School of Hygiene and Tropical Medicine, said: "This evidence supports the rationale for 20mph zones, not just in major cities in Britain, but also in similar metropolitan areas elsewhere.
"Indeed, even within London, there is a case for extending the currently limited provision of such zones to other high casualty roads."
He estimated that 20mph zones in London save 200 lives a year, but this could increase to 700 if plans to extend the zones were implemented. "
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"Results: The introduction of 20 mph zones was associated with a 41.9% (95% confidence interval 36.0% to 47.8%) reduction in road casualties, after adjustment for underlying time trends. The percentage reduction was greatest in younger children and greater for the category of killed or seriously injured casualties than for minor injuries. There was no evidence of casualty migration to areas adjacent to 20 mph zones, where casualties also fell slightly by an average of 8.0% (4.4% to 11.5%).
Conclusions: 20 mph zones are effective measures for reducing road injuries and deaths."
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Not really.
"annual economic growth averaged only 1.6 percent per capita between 1992 and 2007 — low even by Mexican standards until the 1980s.
The authors blame several problems that contributed to the low growth. While those problems are not exclusively Nafta’s fault, the authors argue that they are part of a broader Nafta-based economic strategy that shunned the public sector’s role in promoting growth.
For example, despite the increase in foreign direct investment, domestic investment decreased.
There are several reasons for this. Local companies went out of business because they could not compete with imports. Foreign companies that invested in Mexico did not source from Mexico, and Nafta’s conditions prevented Mexico from requiring local purchases. At the same time, public investment fell because Mexico adopted strict fiscal policies to achieve macroeconomic stability…"
links for 2009-12-04
05-Dec-09
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Excellent summary of the debate over RE (randomised evaluation, not religious education) in development.
links for 2009-12-02
03-Dec-09
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Adam Posen says (see the text of his speech too):
- Monetary policy is not to blame for asset price bubbles
- Monetary policy tightening will not work against bubbles
- Real estate bubbles cause more economic damage but do nothing for productivity
- We should directly target real estate bubbles with specific countervailing taxes -
There was outrage today at the revelation that increasing numbers of journalists are writing for national newspapers while unable to distinguish between levels and rates of change.
Greg Hurst, Edukashun Editor of the Times:
"Statisticians said that the cost of hiring large numbers of support staff to ease teachers’ workloads, combined with falling pupil numbers, in effect cancelled out the benefits of improved exam results. As a result, productivity in the education sector had been on a downward trend for eight years and last year fell to zero."
Zero productivity! That would be terrible, if it actually happened. But it didn't. Instead, lower class sizes gets counted as lower productivity, so the *rate of change* of productivity in education can fall or even go negative as you put more money into the system.
Why oh why can't we have a semi-numerate press corps?
links for 2009-12-01
02-Dec-09
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Superb piece about the strange nodes of the internet's physical infrastructure.
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Ed Glaeser:
"Fifty-story buildings are an efficient way to deliver plenty of space, but extreme height is far more expensive and a bellwether of irrational exuberance.
Five of the 10 tallest buildings in New York City today were planned at the tail end of the ebullient 1920s and completed in the early 1930s. In their day, they were the tallest structures in the world, but it took more than a decade for the Empire State to stop being the “Empty State Building.” …
Great cities have long been built by great gamblers, and Dubai’s sheik may well be the second greatest city-builder—after the Chinese government— of our age. Many of those gamblers have ended up bankrupt, but their structural legacies remain, providing the space that connects humanity and facilitates the success of our urban world."