Fairly Recently: Must- and Should-Reads, and Writings...
Blame the Economists?: Fresh at Project Syndicate: Ever since the 2008 financial crash and subsequent recession, economists have been pilloried for failing to foresee the crisis, and for not convincing policymakers of what needed to be done to address it. But the upheavals of the past decade were more a product of historical contingency than technocratic failure...
Weekend Reading: Robert Solow: A Theory Is a Sometime Thing: "Milton Friedman... aims to undermine the eclectic American Keynesianism of the 1950s and 1960s... goes after two... lines of thought. His first claim is that the central bank, the Fed, cannot ‘peg’ the real interest rate... to undermine the standard LM curve.... The Fed can peg the nominal federal funds rate, but not the real rate.... My mind kept returning to a famous line of dramatic verse: was this the face that launched a thousand ships?.... A few major failures like those I have registered in this note may not be enough for a considered rejection of Friedman's doctrine and its various successors. But they are certainly enough to justify intense skepticism, especially among economists, for whom skepticism should be the default mental setting anyway. So why did those thousand ships sail for so long, why did those ideas float for so long, without much resistance? I don't have a settled answer...
Ricardo J. Caballero: Risk-Centric Macroeconomics and Safe Asset Shortages in the Global Economy: An Illustration of Mechanisms and Policies: "In these notes I summarize my research on the topic of risk-centric global macroeconomics. Collectively, this research makes the case that a risk-markets dislocations perspective of macroeconomics provides a unified framework to think about the mechanisms behind several of the main economic imbalances, crises, and structural fragilities observed in recent decades in the global economy. This perspective sheds light on the kind of policies, especially unconventional ones, that are likely to help the world economy navigate this tumultuous environment... #monetarypolicy #monetaryeconomics #finance
Up until 2000, it looks like we have an unemployment-rate (or vacancy-rate) adaptive-expectations price Phillips curve. Since the mid-1990s, we have a non-employment-rate static-expectations wage Phillips curve. How long before another structural shift we do not know. But right now Team Slack has the empirical evidence. And Team Slack says: the economy still has plenty of room to grow: Jay C. Shambaugh: Score One for Team Slack: "As @ModeledBehavior notes, it is not clear how long this relationship will hold, but it looks really good in 2018 (even better than in 2017). Almost impossible to argue slack is not part of wage growth story even if you don't think it is whole story... #labormarket #monetarypolicy #phillipscurve
Cosma Shalizi (1998): Deborah Mayo, Error and the Growth of Experimental Knowledge: "Mayo's key notion is that of a severe test... the severity of a passing result is the probability that, if the hypothesis is false, our test would have given results which match the hypothesis less well than the ones we actually got do.... If a severe test does not turn up the error it looks for, it's good grounds for thinking that the error is absent... #books #cognition
Rodney Brooks: The Seven Deadly Sins of AI Predictions: "Imagine we had a time machine and we could transport Isaac Newton from the late 17th century to today, setting him down in a place that would be familiar to him: Trinity College Chapel at the University of Cambridge. Now show Newton an Apple. Pull out an iPhone from your pocket, and turn it on so that the screen is glowing and full of icons, and hand it to him... #riseoftherobots
Michael Strain: Protect the Gains Made by Low-Skilled Workers: "Inflation-fighting is important. But so is the progress made by the most vulnerable U.S. workers...
Michael Kremer (1993) The O-Ring Theory of Economic Development http://www.jstor.org/stable/2118400: "People in business talk about quality all the time.... This paper makes a stab at modeling quality... proposes an O-ring production function in which quantity cannot be substituted for quality.... Under this production function, small differences in worker skill lead to large differences in wages and output... #economicgrowth
Neel Kashkari: Pause Interest-Rate Hikes to Help the Labor Force Grow: "The Fed has raised the federal-funds rate eight times in the past three years, and inflation now stands right at the 2% goal. A hard inflation ceiling would justify pre-emptive rate increases to ensure inflation doesn’t climb any higher. But the symmetric objective gives the Federal Open Market Committee the flexibility to see how the economy evolves before determining if further rate increases are necessary. The FOMC should seize this opportunity for a pause... #monetarypolicy
Abhay Aneja: The Effect of Political Power on Labor Market Inequality: Evidence from the 1965 Voting Rights Act #rqce
James Heckman and Sidharth Moktan: The Tyranny of the Top Five: "The appropriate solution requires a significant shift from the current publications-based system of deciding tenure to a system that emphasises departmental peer review of a candidate's work. Such a system would give serious consideration to unpublished working papers and to the quality and integrity of a scholar's work... #berkeley #economicsgonewrong
Adam Ozimek: The Main Story: We Aren't at Full-Employment Now: "The main story here is we aren't at full-employment now. And we sure as hell weren't at full employment in 2015, 2016, 2017 when so many leading economists said we were... #monetarypolicy #labormarket
Halloween Whiteboard: The Undead Generals: ROB FARLEY, SENIOR LECTURER, UNIVERSITY OF KENTUCKY: BILLY MITCHELL (COURTESY NAGASAKI PILOT CHARLES SWEENEY)... #halloween #security
Michael Kremer (1993) The O-Ring Theory of Economic Development http://www.jstor.org/stable/2118400: "People in business talk about quality all the time.... This paper makes a stab at modeling quality... proposes an O-ring production function in which quantity cannot be substituted for quality.... Under this production function, small differences in worker skill lead to large differences in wages and output... #economicgrowth
Scam o Rama: Quit While You're Ahead: "Another missive from Thomas Mallory, last heard from in The Flying Savimbi Brothers. Note: Just so you know: Mr. Mallory's attorney, Melanie Rourke, is possibly meaner than Lonslo Tossov. We actually edited some of her dialogue. We just felt the need. Mr. Mallory was very nice about it. Call us politically correct if you like. Just don't call us late for dinner...
Richard Woodward (2003): Too Much of a Good Thing - The Atlantic: ".The theoretical physicist who ignited the biggest firestorm in the history of the American photography market was simply trying to figure out if his vintage photos were genuine. By the time he learned the answer, two of the country's best-known photography scholars had come under a cloud of suspicion...
Five-Thirty-Eight: Geoffrey Skelley: House Update: Keeping An Eye On Democratic ‘Reach’ Districts: "the battleground for the House is quite large: In the Classic version of our House forecast, there are 111 districts where both parties have at least a 5 percent chance of winning, as of 8 p.m. Eastern on Nov. 3. But Republicans are defending most of these districts — 102 of them, in fact. So one possibility on Election Day is that Democrats end up winning a few “reach” districts (in which their odds of winning are greater than 5 percent but less than 35 percent). Under those conditions, Democrats are underdogs in 63 of the 102 districts Republicans are defending... #politics #statistics #acrossthewidemissouri
Barry Ritholtz: Trump the Revealer: "President Trump... has revealed (or reminded) many great truths to us.... We can learn a great deal about many things simply from watching his effects on the world. There is no guile, just a super-natural tendency to appeal to people’s basest instincts–supporters, opponents, media, everyone.... Racism is not even well-hidden or contained.... my naïveté assumed it was only insane people shooting up black churches in the deep south.... We learned thanks to Trump–that White Supremicists/Nationalism is a real thing across America, and full equality is still years or decades away for people of color. #orangehairedbaboon #politics
Steve M.: Democrats Would Really Be In Trouble If Trump Were A Totally Different Person!: "Douthat's argument seems to be: 'Imagine if we Republicans had all of our current advantages, none of our current disadvantages, and quite a few advantages we don't have now. Then the Democrats would be in trouble! And that just shows how weak the Democrats really are!' Yeah, I guess...
Atrios: Hard to Beat a Foe That Doesn't Give a ----: "Chinese politics.... They can probably figure out how to get soy from elsewhere. Any one good might not matter that much for our economy overall, but it's pretty easy to inflict pain on certain geographic populations/areas.... 'American soybean sales to China have declined by 94 percent from last year’s harvest.'... President Deals isn't going to 'win' any trade wars...
#shouldread #weblogging
