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April 2018

Gains from Trade: Is Comparative Advantage the Ideology of the Comparatively Advantaged?

Gains from Trade: Is Comparative Advantage the Ideology of the Comparatively Advantaged?: Trade, technology, job losses, and globalization–and their effects on prosperity and political turmoil.

Chair: Rohinton Medhora
Speakers: Brad Delong, Nadia Garbellini, Kaveh Majlesi, Arjun Jayadev
Discussant: Joseph Stiglitz, Pia Malaney


American Economic History: Slides for Wrap-Up Lecture...

Each time I do this I think there must be a way to do it better. But each time I fail to think of one...

Good ideas very welcome...

Here we are


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Intermediate Macroeconomics: Econ 101b: Spring 2018: U.C. Berkeley: Sample Final (DRAFT)

In a sense, closed book exams have been obsolete since 1500. You could argue before 1500 that people would often find themselves in situations in which they had to produce documents and write answer is calling on nothing but what they had currently running on their own wetware. Books, after all, were very expensive. At five pages an hour, figure it would take a month to produce one copy of a book, and that is only the direct, skilled labor required.

After 1500, however closed book exams made no sense—at least not without a theory of why acting like a medieval monk would in fact teach habits of mind and thought that would help us think and write in a world where people were surrounded almost always by their notes and their libraries.

And now, of course, the young ones are never without their smartphones.

So it is time for us professors to start writing exams that test and teach habits of thought relevant for a world in which you have rapid broadband access to the entire online library of humanity at nearly every instant.

Therefore this exam is open note, open book, and open smartphone—or whatever other device you wish to bring...

Only one form of information access is prohibited: direct two-way interaction with other Turing class entities). In case you are uncertain, here are examples of five examples of Turing class entities:

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Your Own Private Intellectual Elysium: Delong Morning Coffee Podcast

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By judiciously muting and blocking people you can create a truly useful individual Internet feed. The problem is that that does nothing to produce a truly useful functioning intellectual community. And that is what we really need...

Your Own Private Intellectual Elysium

Thx to Wavelength and the very interesting


Every country has its depressed regions, dominated by cultures that cling to habits of thought and cultural patterns that no longer take advantage of local resources and global markets and so deprive them of opportunity, wealth, and happiness: its mezzogiorno, its Ostmark, its Appalachia. Yet only in America today does it seem to amount to half a country, and have a plutocratic poiltical party fighting hard to enlarge it: Noah Smith: Zero-Sum Thinking Makes Our Fights Much Nastier: "Universities, meanwhile, continue to be the engine of American technological dominance...

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Republicans purge every thinker who was correct. Republican economists who were right about 2007-2012 are now, as best as I can see, all ex-Republican economists. And the same dynamic has long been working in the national security space: Gene Healy (2015): Think Tanks and the Iraq War: "It would be even better if the GOP’s 2016 contenders weren’t still, 12 years later, so eager to seek foreign policy advice from people who got the Iraq War Question spectacularly wrong...

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As Chief Acolyte of the "hysteresis view", I must protest! The very sharp Benoît Cœuré thinks "hysteresis" means that the sharp downward shock to the level of production in 2008-2010 has caused a permanent fall in the long-run growth rate. But that is not what we ever said: We said that not all of the sharp downward shock to the level of production in 2008-2010 would be made up, not even after decades. We are now one decade after the shock, and so far "not all" means "20%"—only one-fifth of the gap between production after the downward shock and the previous trend has been recouped. I hope and expect that 20% to grow over the next two decades. But it is not going to reach 100%: the "hysteresis view" has proved correct: Benoît Cœuré: Scars that never were? Potential output and slack after the crisis: "To be clear... I do believe that deep recessions can have effects on the supply capacity of the economy that may take some time to unwind...

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Sample In-Class Exam: American Economic History: Spring 2018

Two-sentence IDs: what is it, and why does it feature in American economic history? (exam will offer you a choice to do 10 out of 15):

  1. Caravel
  2. Cuzco
  3. DARPA
  4. Free Silver
  5. Woodrow Wilson
  6. Lowell, MA
  7. Potosi
  8. Sherman Act
  9. Smallpox
  10. Triangle trade

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Jeet Heer: An Addendum to the Ezra Klein and Sam Harris Debate about Charles Murray: Weekend Reading

Weekend Reading: Can somebody please tell me why Sam Harris was supposed to be interesting and smart?" Jeet Heer: "An addendum to the Ezra Klein and Sam Harris debate about Charles Murray. Harris uses Glenn Loury as a human shield, which is ironic given Loury's history with Murray...

...In his defense, Harris mentions he had the "fantastic" Loury "who happens to be black" on his show. Some of his best podcast guests are black! As it happens, Glenn Loury and Charles Murray have an interesting and salient history.

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Keynes's General Theory Contains Oddly Few Mentions of Fiscal Policy: Delong Morning Coffee Podcast

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In Keynes’s General Theory the question of why “it seems unlikely that the influence of banking policy on the rate of interest will be sufficient by itself…” is left hanging. The question of how a “somewhat comprehensive socialization of investment“ is to be implemented is left hanging as well. There are remarkably a few references to “fiscal policy” in any form. So will somebody please explain to me why “fiscal policy” plays such a small part in the General Theory, while playing such a large part in mindshare perceptions of “Keynesianism”?...

Keynes's General Theory Contains Oddly Few Mentions of "Fiscal Policy"

Thx to Wavelength and the very interesting



Mark Thoma on the 2009-2015 Dark Age of Macroeconomics: Weekend Reading

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Weekend Reading: I would have said that the Dark Age is over. But the behavior of professional Republican economists formerly of note and reputation—and I am looking at you, Robert Barro, Harvey Rosen, Douglas Holtz-Eakin, Larry Lindsey, John Taylor, John Cochrane Glenn Hubbard, Michael Boskin, Charlie Calomiris, Jim Miller, Jagdish Bhagwati, and George Shultz: you know better. And, Marty Feldstein, you really should not have written your defense of Trump's China tariffs. The 2009-2014 Dark Age looks to me, mostly, like a deliberate decision to be stupid and not think issues through. This one looks like a last, vain attempt to gain some influence on Republican policy: Mark Thoma (2009): "A Dark Age of Macroeconomics": "Quoting an email [from Paul Krugman], economists who...

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Paul Krugman (2012): Economics in the Crisis: Weekend Reading

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Weekend Reading: This still cuts me to the quick. I am not at all a depressive personality—but if I were, this would have me pulling an Oblomov every time I remember that I am part of a professional discipline that was, collectively, so useless in 2009-12, and that I used to praise the analytical acumen and tell people to listen to and take seriously so many of those who made us so useless: Paul Krugman (2012): Economics in the Crisis: "We’re now in the fourth year of a truly nightmarish economic crisis. I like to think that I was more prepared than most for the possibility that such a thing might happen; developments in Asia in the late 1990s badly shook my faith in the widely accepted proposition that events like those of the 1930s could never happen again. But even pessimists like me, even those who realized that the age of bank runs and liquidity traps was not yet over, failed to realize how bad a crisis was waiting to happen–and how grossly inadequate the policy response would be when it did happen...

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Ed Kilgore: Kevin Williamson Stays Mute on What the Punishment for Abortion Should Be: Weekend Reading

Ed Kilgore: Kevin Williamson Won’t Answer Questions About Abortion Punishment: "Conservative political writer Kevin Williamson... his recent dismissal by The Atlantic... column... mostly about the... 'Twitter mob' intimidating The Atlantic into un-hiring him...

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Not just center city but suburban regions in NIMBY regions need to increase their density: more townhouses, more ADUs.

To a large extent the power of NIMBYism in suburban—and many truly urban—jurisdictions springs from the right-wing tax revolt of the 1980s. With property taxes capped, development ceases to be an opportunity and becomes a problem—how are we going to fund their services?—for the technocrats and the bureaucrats who manage America's local government and infrastructure.

Their shift from being pro- to anti-development is a big part of the problem:

Issi Romem: America's New Metropolitan Landscape: Pockets of Dense Construction in a Dormant Suburban Interior: "City planners tend to favor concentrating residential development in dense hubs because they lend themselves to service by public transit, which helps reduce the impact of new residents on emissions and traffic congestion...

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Comment of the Day: JEC: Protecting Ourselves from Facebook: "I think it's worth mentioning that (a) 'How do I protect my privacy?'...

...and (b) "How do I protect myself from hostile psyops?" are different questions with partially overlapping answers. And "How do I protect myself from the actions of my neighbors who fail to protect themselves from hostile psyops?" is a third, and arguably more important, question...


I don't understand why these smart authors are playing such small ball. More colleges, less NIMBYism. FDR didn't provide subsidies to people to move to where there was electricity, did he? And it is not just recent college graduates who have such difficulty moving to opportunity, is it?: Abigail Wozniak and Jay Shambaugh: Why We Need to Help Kids Go to College Wherever They Want: "Previous generations of young adults were much more likely to move for career opportunities...

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More and more it looks as though minimum wage laws—and unions—are positive second-best interventions that raise societal wellbeing by blunting the impact of employer monopsony: Kevin Rinz and John Voorheis: The Distributional Effects of Minimum Wages: "States and localities are increasingly experimenting with higher minimum wages in response to rising income inequality and stagnant economic mobility...

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John Quiggin: Hackery or Heresy?: Weekend Reading

Clowns (ICP)

Weekend Reading: John Quiggin: Hackery or heresy: "Henry’s recent post on the irrelevance of conservative intellectuals reminded me of this one from 2013, which concluded...

...Conservative reform of the Republican party is a project that has already failed. The only question is whether the remaining participants will choose hackery or heresy.

Overwhelmingly, the choice has been hackery (or, a little more honorably, silence).

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The “Let’s Be Agnostic About Race Science” Clowns Are In My Twitter Timeline Again: Delong Morning Coffee Podcast


Do your arithmetic, Sheeple! 1500 generations since radiation from the horn of Africa is really very little indeed...

The “Let’s Be Agnostic About Race Science” Clowns Are In My Twitter Timeline Again

Thx to Wavelength and the very interesting



The most interesting thing in retrospect is how insistent Marty is here that "BAD BIG GOVERNMENT" arrived suddenly and discontinuously in 1967—that the U.S. economy was fine up until then, but that afterwards things fell off a cliff with "government policies... deserv[ing] substantial blame for the adverse experience[s] of the past decade". Plus an awful lot of cherry-picking—like assessing corporate America based on the ten large firms whose stock prices plunged the most. And, of course, it was Mary's guy Ronnie whose policies wound up imposing much larger drags on societal wellbeing, from income maldistribution through draining the pool of productive savings to slow-walking equal opportunity: Out of the Frying Pan Into the Fire: Government as the Problem in the 1970s and 1980s: Martin Feldstein (1979): Introduction to The American Economy in Transition: "The post-[World] War [II] period began in an atmosphere of doubt and fear...

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I sometimes wonder whether this isn't getting much of the problem backward. If your personalized data collected is valuable for hacking your brain—getting you to buy or do things you afterwards wish you had not bought or done—then keeping someone, somewhere from collecting it is going to be difficult. Don't we also need defenses against seeing things from people who do not wish to inform and educate us? In short, isn't AdBlock a bigger piece of the answer?: Zeynep Tufekci: We Already Know How to Protect Ourselves From Facebook: "Personalized data collection would be allowed only through opt-in mechanisms that were clear, concise and transparent...

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Well, you write documentation for the you that is writing the code. You don't write documentation for the enormous idiot who will read and have to try to understand the code—i.e., the you two years into the future

Rachael Meager: Me trying to read code I wrote 2 years ago:

Gandalf gif i have no memory of this place Google Search

Folks this code is documented. The problem is you write documentation from a biased perspective...

#ontwitter #shouldread #datascience

"If getting China to pay what it owes for technology were the goal, you’d expect the U.S.... to make specific demands... and... build a coalition", a Tran-Pacific Partnership, so to speak: Paul Krugman: The Art of the Flail: "Whenever investors suspect that Donald Trump will really go through with his threats of big tariff increases... stocks plunge...

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The Tech Boom and the Fate of Democracy: Ars Technica Live: Definitely Not My Morning Coffee

Definitely Not My Morning Coffee: Ars Technica Live: Annalee Newitz and Brad DeLong: The Tech Boom and the Fate of Democracy "Ars Technica Live #21... Filmed by Chris Schodt, produced by Justin Wolfson...

Annalee writes: "Last week, we had lots of questions about the fate of democracy in a world where the Internet feeds us propaganda faster than we can fact check it...

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Matthew Yglesias: "You have to understand the growing prominence of overt racism in conservative politics as reflecting the collapse-without-replacement of the other parts of the program...

... The Trump economic agenda is not actually different from the Bush agenda even as it implicitly recognizes that Bushism is not tenable anymore. On cultural issues, the whole elaborate framework around blocking marriage equality while touting marriage as a poverty cure has evaporated but again replaced with nothing at all or what amount to irritable mental gestures about bakeries..."

#shouldread #ontwitter #livefromtheorangehairedbabooncage

Justin Wolfers: "The first rule of tariffs is don’t impose them. The second rule is don’t impose them on intermediate inputs and capital equipment used by American businesses, or you’ll just hurt their competitiveness. This tweet isn’t about the stink of scandal or the excitement of a gotcha, but rather mundane incompetence that’ll cost people their jobs..."

#shouldread #ontwitter

If you did not read this over at Equitable Growth Value Added a year and a half ago when it came out, you should go read it now: Emmanuel Saez (2016): Taxing the rich more—evidence from the 2013 federal tax increase: "In 2013, a surtax on high earners was levied to help pay for the Affordable Care Act at the same time as the 2001 tax cuts for high-income earners that were signed into law by President George W. Bush expired...

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The idea that the collapse of the aristocratic Roman Free State into the Roman Empire was due to wild dissipative partying—luxus, a vice caught from the Greeks and "Asiatics", giving rise to avaritia, which then leads to ambitio and cupido imperii—was originally a meme put forward by those I regard as the true villains—plutocrats and political norm breakers—to avoid responsibility: A.W. Lintott (1972): Imperial Expansion and Moral Decline in the Roman Republic: "Imperial expansion in general did of course have divisive economic and political effects...

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Clowns (ICP)

Economics Gone Wrong: I swing back and forth between simply thinking that:

  • John Taylor has become unprofessional in writing things like Fed Policy Is a Drag on the Economy in which he claims that Federal Reserve quantitative easing is "imposing an interest-rate ceiling on the longer-term market by saying it will keep the short rate unusually low... much like... a price ceiling in a rental market where landlords reduce the supply of rental housing..."

  • John Taylor is still very professional—but that he is not a professional economist but rather a professional Republican.

Hoisted from the Archives (October 2015): Central Banks Are Not Agricultural Marketing Boards: Depression Economics, Inflation Economics and the Unsustainability of Friedmanism: Insofar as there is any thought behind the claims of John Taylor and others that the Federal Reserve is engaged in "price controls" via its monetary policy actions...

Strike that.

There is no thought at all behind such claims at all.