Monday Smackdown: Hoisted: Cliff Asness Department

Fairly Recently: Must- and Should-Reads, and Writings... (November 26, 2018)


  1. Monday Smackdown: Hoisted: Cliff Asness Department: Cliff Asness spent 82 minutes talking to Tyler Cowen. The phrase "Federal Reserve" does not appear in the transcript. The phrase "quantitative easing" does not appear in the transcript. The word "monetary" does not appear in the transcript. The word "debasement" does not appear. Tyler Cowen does not ask questions using any of those words. Cliff Asness does not use any of those words in answering questions. Seems to me Cliff Asness owes Ben Bernanke a big apology for this. And perhaps he could give us some clues as to whether he has learned anything from looking back at his wrong claim that Bernanke did not understand what the Federal Reserve should be doing?...

  2. Weekend Reading: Hilzoy: Liberating Iraq (from 2007)

  1. Elizabeth Bear: Shoggoths in Bloom

  2. Samantha Henderson: Maybe the Stars

  3. Wikipedia: United States Floating Battery Demologos

  4. Roger Farmer: How New Keynesian Economics Betrays Keynes: "Self-fulfilling beliefs could explain business cycle fluctuations at least as well as the real- business- cycle paradigm that came to dominate graduate programs for the next thirty- five years. But, the sun spot agenda did not have a single strong leader and the figures who wrote the first two papers in the area, Azariadis, and Cass and Shell, were dismissive of the practical and empirical relevance of their ideas...

  5. Philosopher Alex Rosenberg's actions are incomprehensible until you realize that he believes and desperately desires to convince us that there are no such thing as human beliefs or desires. Also: That Henry Kissinger is a bad man. You see the problem? The neurology level is useless if you want a better theory than the folk theory of mind. The behavioral economics level may be becoming useful. But for the life of me I do not see what Rosenberg has to add here. His book begins with a big song-and-dance about how narrative military history is useless because the Germans' opponents were flummoxed all four times the Germans attacked at Sedan between 1870 and 1940, thus—he claims—proving that it is impossible to learn lessons from narrative military history. It's clear why one might think the French (and their allies) failed to learn anything useful from narrative military history. It is much less clear why Rosenberg is so sur his example shows that the Germans- failed to learn from narrative military history: Alex Rosenberg: _How History Gets Things Wrong: "The Kaiser wasn’t thinking about anything at all when he gave the 'blank-check' to the Austrians. He didn’t have any desires about how matters should turn out, or any beliefs about how to organize things to make them turn out that way. He didn’t because no one has such thoughts... #cognitive

  6. Alan L. Olmstead and Paul W. Rhode: Cotton, Slavery, and the New History of Capitalism

  7. Isaiah Andrews and Maximilian Kasy: Identification of and Correction for Publication Bias: "Some empirical results are more likely to be published than others. Selective publication leads to biased estimates and distorted inference. We propose two approaches for identifying the conditional probability of publication as a function of a study’s results... #minimumwage #equitablegrowth #cognitive #statistics

  8. Overlord

  9. Bad Times at the El Royale

  10. Rory Appleton: Cox Now 447 Votes Behind Valadao

  11. Max Boot: Trump Goes to France and Dishonors U.S. War Dead

  12. This seems to me to pretty much get it wrong. The right way to talk about what is to be called “rational“ is to imbed the problem of thinking in its proper context. I think thought should proceed thus: (1) Do we have time and resources to gather more information before we have to make a decision? If the answer to this question is “yes”, we then face a second question: (2) would gathering more information increase our knowledge enough to make it worthwhile to do so before making our decision? Answering that question requires very un-Bayesian modes of thought. But that question must be answered. And, having answered it, we either go and gather more information or we proceed to question: (3) Are we playing some kind of game against nature, or are we playing against another mind? If the answer is “we are playing against nature”, then it is appropriate to go full Bayesian. If the answer is “we are playing against another month“, then there is yet another question: (four) what is the other morning that we are playing against thinking that makes it willing to enter into this strategic interaction with us? The answer will probably be: “at least one of the two of us is wrong in our understanding of the situation“—as Warren Buffett says: “if you do not know who is the fool in the market, you are the fool in the market”. Attempting to understand the implications of this question also leaves us down very un-Bayesian roads of thought. But understanding the implications of this question is essential to making a rational assessment of the situation. My problem with Gilboa et al. is that their criticisms of Bayesian Savagery do not provide any gruel at all to nourish us and thus help us in our task of figuring out what to do when Bayesian Savagery breaks down, either for information-gathering or for other-mind reasons: Itzhak Gilboa, Andrew Postlewaite, and David Schmeidler (2009): Is It Always Rational to Satisfy Savage’s Axioms?: "To explain our notion of rational choice, consider the following scenario. You are a public health official who must make a decision about immunization of newborn babies. Specifically, you have a choice of including another vaccine in the standard immunization package. This vaccine will prevent deaths from virus A. But it can cause deaths with some probability. The exact probabilities of death with and without the vaccine are not known. Given the large numbers of babies involved, you are quite confident that some fatalities are to be expected whatever your decision is...

  13. I cannot help but thinking that this line of thought misses the elephant in the room. To reset the stories that have been told to us and seek for better stories ought to begin with more thought about why these stories we have inherited are the stories that have been told to us: Amal El-Mohtar (2017): WisCon Guest of Honour Speech: "I am their fury, I am their patience, I am a conversation...

#shouldread #weblogging