Noted for January 14, 2013
Steve M.: No More Mister Nice Blog: "Paul Krugman has been supporting the platinum coin option as an end-run around Republican debt-ceiling terrorism, so he's dismayed by the latest news: ;If I'd spent the past five years living in a monastery or something, I would take the Treasury Department's declaration that the coin option is out as a sign that there's some other plan ready to go. Maybe 14th Amendment, maybe moral obligation coupons or some other form of scrip, something. And maybe there is a plan. But as we all know, the last debt ceiling confrontation crept up on the White House because Obama refused to believe that Republicans would actually threaten to provoke default. Is the WH being realistic this time, or does it still rely on the sanity of crazies?…. If we didn't have some history here I might be confident…. But we do have that history…"
Matthew Yglesias: Jeffrey Lacker: Richmond Fed president keeps being wrong but never changes his mind
JSTOR: Aaron Swartz: "We extend our heartfelt condolences to Aaron’s family, friends, and everyone who loved, knew, and admired him. He was a truly gifted person who made important contributions to the development of the internet and the web from which we all benefit. We have had inquiries about JSTOR’s view of this sad event given the charges against Aaron and the trial scheduled for April. The case is one that we ourselves had regretted being drawn into from the outset, since JSTOR’s mission is to foster widespread access to the world’s body of scholarly knowledge. At the same time, as one of the largest archives of scholarly literature in the world, we must be careful stewards of the information entrusted to us by the owners and creators of that content. To that end, Aaron returned the data he had in his possession and JSTOR settled any civil claims we might have had against him in June 2011."
Greg Sargent: Business leaders to GOP: No more debt limit hostage taking!
Nick Rowe: Worthwhile Canadian Initiative: Did inflation targeting make inflation stickier?: "I used to think that if the Bank of Canada succeeded in keeping inflation on target, there wouldn't be deficient-demand recessions…. I was wrong. The Bank of Canada did keep inflation almost exactly at the 2% target, but there was a deficient demand recession. If you had told me in 2008 how long the recession would last in many countries, I would have predicted that inflation would have fallen a lot in those countries. It didn't fall a lot. In some countries, like the UK, it didn't fall at all. I would have been wrong. It didn't use to be like this. In past recessions, absent significant supply shocks, inflation did fall a lot…. Those two things I was wrong on are related…. Why didn't that happen like it was supposed to? One possible answer is that inflation targeting made inflation stickier than it used to be…. Imagine some sort of simultaneous-moves Nash game, which is partly an American Beauty Contest. Each individual player has to pick a number. He is trying to pick a number that is the same as the average number picked by all the other players, plus or minus some amount that reflects a shock specific to him. He knows that all the other players are trying to do the same…. [S]omebody stands up in the middle of the room and loudly calls out "2%! I want you all to choose 2%!". It would be very tempting just to give up on all the Nash stuff, ignore the shocks, and just choose 2%. I know. That's not a model. It's not even a fully-coherent story."
Mark Pennington: ‘The Left’ and Public Choice Theory « Pileus: "Public choice theory poses some difficult questions for ‘the left’. If one takes an ‘interest-based’ view of politics then public choice offers a more plausible account of the way special interests seek and gain power than its leftist rivals – and of how to minimise the threat presented by such interests. If on the other hand one takes the view that ideas matter more than interests then the left is robbed of much of the ‘them versus us’ rhetoric which historically has been one of its most important vehicles of political recruitment."
The Economist: Innovation pessimism: Has the ideas machine broken down?: "It may come as a surprise that some in Silicon Valley think… that the rate of innovation has been slackening for decades. Peter Thiel… says that innovation in America is 'somewhere between dire straits and dead'…. The argument that the world is on a technological plateau runs along three lines. The first comes from growth statistics…. Intensive growth is powered by the discovery of ever better ways to use workers and resources…. And at the moment, in the rich world, it looks like there is less of it about…. This is hardly unusual. For most of human history, growth in output and overall economic welfare has been slow and halting…. The pessimists’ second line of argument is based on how much invention is going on…. The growth in the number of people working in research and development might seem to contradict this picture of a less inventive economy…. One factor in this may be the “burden of knowledge”: as ideas accumulate it takes ever longer for new thinkers to catch up with the frontier of their scientific or technical speciality. Mr Jones says that, from 1985 to 1997 alone, the typical “age at first innovation” rose by about one year…. The third argument is the simplest: the evidence of your senses. The recent rate of progress seems slow compared with that of the early and mid-20th century…. To those fortunate enough to benefit from the best that the world has to offer, the fact that it offers no more can disappoint…. Closer analysis of recent figures, though, suggests reason for optimism…. Research by Susanto Basu of Boston College and John Fernald of the San Francisco Federal Reserve suggests that the lag between investments in information-and-communication technologies and improvements in productivity is between five and 15 years. The drop in productivity in 2004, on that reckoning, reflected a state of technology definitely pre-Google, and quite possibly pre-web…. For some, though, the opposite outcome is the one to worry about. Messrs Brynjolfsson and McAfee fear that the technological advances of the second half of the chessboard could be disturbingly rapid, leaving a scourge of technological unemployment in their wake…. Pattern-recognition software is increasingly good at performing the tasks of entry-level lawyers…. Algorithms are used to write basic newspaper articles on sporting outcomes and financial reports…. Manual tasks are also vulnerable…. Such productivity advances should generate enormous welfare gains. Yet the adjustment period could be difficult. In the end, the main risk to advanced economies may not be that the pace of innovation is too slow, but that institutions have become too rigid to accommodate truly revolutionary changes—which could be a lot more likely than flying cars."
Duncan Black: Eschaton: Sunday Crass Commercialism: "I'd recommend Fringe for people who like that sort of thing…. There are dropped and unresolved plots (well, finale is next week so who knows), but the overall mythology is far more coherent than the X-Files was and much less random than I understand (didn't see) Lost's was…. And it's lasted about as long as it should. I like the show so it'll be a bit of a shame when it's gone, but it has probably run its course."
