Grasping Reality on TypePad, by Brad DeLong

Project Syndicate: Unloaded for Bear: "With an extended government shutdown in the United States spooking investors, and further signs that China’s economy is slowing, market volatility has spiked in recent weeks. Worse, policymakers are ill-prepared for another economic downturn. In this Big Picture, Nouriel Roubini explains how US President Donald Trump finally shattered the rosy outlook that defined market sentiment over the past two years. Barry Eichengreen... Kenneth Rogoff... J. Bradford DeLong... Benjamin J. Cohen... Jim O'Neill notes that engine of the global economy over the past decade–Chinese domestic consumption–may slow indefinitely, which bodes ill for a quick recovery...

C. J. Cherryh: Alliance-Union Chronology

Daniel Larison: Threat Inflation and "The Jungle Grows Back": "Damir Marusic has written an incisive review of Robert Kagan’s The Jungle Grows Back.... 'Kagan... rues the fact that... no bogeyman big enough to keep Americans focused on maintaining their preeminent position in the world exists.... Kagan therefore makes an attempt to cast first Vladimir Putin’s Russia, and then Xi Jinping’s China, as authoritarian challengers and potential threats to the American way of life...' The end of the Cold War was a calamity for many hawks because it deprived them of a sufficiently powerful and menacing adversary, and the history of U.S. foreign policy over the last three decades has been the desperate search for a suitable replacement...

Marina Hyde: Welcome to the Westminster apocalypse. Have you thought about theocracy instead?: "Here comes the affectedly shambling figure of Boris Johnson—not so much a statesman as an Oxfam donation bag torn open by a fox–who could conceivably still end up prime minister of no-deal Britain. May needed to go again to the EU 'with a high heart, fortified by the massive rejection of the House of Commons', judged Johnson, speaking as always like a Taiwanese news animation of Winston Churchill. In the meantime, 'we should be actively preparing for no deal with ever more enthusiasm'... #brexit #globalization #orangehairedbaboons

This book is fun!: Jeff Erickson: Algorithms: "'Algorithm' does not derive... from the Greek roots arithmos (αριθοσ), meaning “number”, and algos (αλγοσ), meaning 'pain'. Rather, it is a corruption of the name of the 9th century Persianm athematician Muhammad ibn Musa al-Khwarizmi. Al-Khwarizmi is perhaps best known as the writer of the treatise Al-Kitab al-mukhtasar fihisab al-gabr wal-muqabala, from which the modern word algebra derives. In a different treatise, al-Khwarizmi described the modern decimal system for writing and manipulating numbers—in particular, the use of a small circle or sifr to represent a missing quantity—which had been developed in India several centuries earlier. The methods described in Al-Kitab, using either written figures or counting stones, became known in English as algorism or augrym, and its figures became known in English as ciphers... #reasoning

Daniel Sullivan: Econtools 0.1 Documentation

Robert Bork and his followers' belief that the test for anticompetitive behavior was whether it could be proved anticompetitive in theory beyond a reasonable doubt was poisonous. And here we see people having to argue against it again in a new context: Jonathan B. Baker and Fiona Scott Morton: Antitrust Enforcement Against Platform MFNs: "Antitrust enforcement against anticompetitive... pricing parity provisions... can help protect competition in online markets.... These contractual provisions may be employed by a variety of online platforms offering, for example, hotel and transportation bookings, consumer goods, digital goods, or handmade craft products. They have been the subject of antitrust enforcement in Europe but have drawn only limited antitrust scrutiny in the United States... #monopoly

14th Amendment: "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws...

If you have not already read all of the WCEG's top 12 of 2018, go read them now: Equitable Growth: Top 12 of 2018: "The effects of wealth taxation on wealth accumulation and wealth inequality.... Why macroeconomics should further embrace distributional economics.... The links between stagnating wages and buyer power in U.S. supply chains.... U.S. income growth has been stagnant. To what degree depends on how you measure it.... Income inequality and aggregate demand in the United States.... Presentation: U.S. Inequality and Recent Tax Changes.... The latest research on the efficacy of raising the minimum wage above $10 in six U.S. cities.... Competitive Edge: There is a lot to fix in U.S. antitrust enforcement today.... Labor Day is a time to reflect on reviving workers’ power in the U.S. economy.... Kaldor and Piketty’s facts: The rise of monopoly power in the United States.... How the rise of market power in the United States may explain some macroeconomic puzzles.... Puzzling over U.S. wage growth... #equitablegrowth

Wolfgang Münchau: The Self-Fulfilling Prophecy of a No-Deal Brexit: "I believe that the probability of a no-deal Brexit is higher than you think. Much higher.... A no-deal Brexit is clearly not rational. But if you look at the incentives of each individual decision maker, you may find there are worse options than no deal for each one of them... #globalization #orangehairedbaboons

James Lenman (2000): Consequentialism and Cluelessness on JSTOR

The Twilight Zone: Cradle of Darkness

Wikipedia: Novikov Self-Consistency Principle

Dylan Matthews: The Baby Hitler Controversy, Explained: "If you woke up this morning and asked yourself, 'Would conservative podcaster Ben Shapiro travel backwards through kill and murder Adolf Hitler when Hitler was a tiny baby?', then (a) you should seek help but (b) I have an answer to your question... #moralphilosophy

Maurice LeBlanc*: The Teeth of the Tiger (Arsene Lupin) #books

Enda Kenny (2011): Cloyne Report: "Taoiseach Enda Kenny has strongly criticised the Vatican for what he said was an attempt to frustrate the Cloyne inquiry, accusing it of downplaying the rape of children to protect its power and reputation...

Brad DeLong (2007): On Robert Barro's (2005) "Rare Events and the Equity Premium" and T.A. Rietz's (1988) "The Equity Risk Premium: A Solution": Our habit of using the Lucas-tree model of Lucas (1978), ["Asset Prices in an Exchange Economy](http://links.jstor.org/sici?sici=0012- 9682%28197811%2946%3A6%3C1429%3AAPIAEE%3E2.0.CO %3B2-I) as a workhorse has turned out to be a trap. The Lucas-tree model has neither production nor accumulation. This makes it easy to solve. But this makes its responses perverse. There are no scarce resources to be allocated among alternative uses. There are only asset prices which must move so as to make agents unwilling to try to reallocate resources. It is, I think, not surprising that an economic model in which resource allocation plays no role is a dangerous tool to use in trying to understand the world... #economicsgonewrong #finance

Wikipedia: Leonid Kantorovich #economicsgoneright

Stefan Rahmstorf: "Earth is anomalously warm, but North America is cold. A huge blob of icy Arctic air, usually corralled up north by the polar vortex, has escaped and moved south. You can check the data here: http://cci-reanalyzer.org/wx/DailySummary/#t2anom Is this becoming more common, and why?... Marlene Kretschmer... has just finished her PhD thesis... has found that over the last decades, the stratospheric polar vortex has become weaker and less stable, so Arctic air masses can escape more easily towards the North American and Eurasian continents... #globalwarming

Ed Dolan: Two Charts That Show How Ill-Prepared We Are for the Next Recession: "In both 2001 and 2007, the Fed was able to begin cutting the fed funds rate based on early indications of trouble, and still have room for maneuver. Today’s situation is not as favorable..... If a recession were to come any time soon, the deficit will quickly eclipse the 10 percent mark that it approached at the bottom of the Great Recession. Even if we accept the technical feasibility of large-scale stimulus under those conditions, it would take a Congress with a lot more political courage than the one we have now to pass a robust countercyclical package of tax cuts and spending increases under those conditions.... DeLong is right. We are not ready for the next recession...

Dani Rodrik: Where are we in the economics of industrial policies? | VoxDev: "While it is too early to suggest that research on industrial policy has taken off, these newer studies do advance our understanding of industrial policies on several fronts. We have a better sense of the economic and institutional circumstances under which industrial policy can contribute to economic development...

Robert Waldmann (2016): Dynamic Inefficiency https://delong.typepad.com/dynamicinefficiency-2.pdf: "Is public debt a burden?... It is possible in theory that the answer is no and that higher [initial] public debt causes permanently higher [balanced-growth path] consumption and welfare.... This is called dynamic inefficiency. The standard result from simple models is that an economy is dynamically inefficient if r is less than g where r is the real interest rate and g is the rate of GDP growth. This formula isn’t very useful in the real world, because... there is a low real interest rate on safe assets and higher rates on risky assets. The standard interpretation of “r” is that it refers to the ratio of total capital income to total capital.... The question of interest is whether increased public debt can cause increased welfare when the safe real interest rate r_safe is lower than g but the average return on capital r is greater than g. I think the answer is yes, so I think it is plausible that, in the real world, greater public debt will cause permanently higher welfare... #publicfinance #fiscalpolicy #equitablegrowth

The curious thing is that Rod Dreher has never had any problems despising and demonizing those who embrace what he sees as bad men and bad causes. But somehow the Trumpists—the Trumpists alone—get a get-out-of-jail-free card from him: Rod Dreher: A Yankee Franco and The Long Defeat: "Conservative Christians will embrace politically a bad man... because unlike left-wing leaders, he doesn’t despise them, and seek to demonize them.... If progressives in America push too hard, and economic conditions are just right, the years ahead may bring about an American Franco—that is to say, a right-wing authoritarian leader who demolishes democracy, and rules by decree... [and] will be popular with half the country.... I deeply wish that the mainstream left... would get a freaking grip on itself, and understand exactly what kind of demons it is calling forth... #moralresponsibility #orangehairedbaboons

Increasing attention to leverage cycles and collateral valuations as sources of macroeconomic risk seems to be very welcome. Leverage and trend-chasing are the two major sources of demand-for-assets curves that slope the wrong way: when prices drop demand falls, either because you need to liquidate in order to repay now-undercollateralized loans or because you do not want to be long in a bear market. And there is every reason to think the government need to take very strong steps to make effective demand curves slope the proper way: Felix Martin: Will there be another crash in 2019?: "One important detail is that this effect is achieved not only directly, by adjusting the cost of borrowing, but also indirectly by making assets cheaper or more expensive... #finance #macro

Really surprised that there is no evidence of boom-bust asymmetry here. I am going to have to dig into what reasonable alternatives are and how much power they have here: Adam M. Guren, Alisdair McKay, Emi Nakamura, and Jon Steinsson: Housing Wealth Effects: The long View: "We exploit systematic differences in city-level exposure to regional house price cycles... #macro #finance

Ian Dunt: Historic Defeat: May Faces Her Day of Judgement: "At the moment there is no majority for no-deal or a People's Vote. Many MPs have ruled out both. But soon they are going to have to decide which of the two they find least objectionable. No-deal comes closer and closer.... Options are likely to whittle down until only a People's Vote is left. The question is whether enough MPs have the bravery and responsibility to prevent no-deal. We're about to find out... #orangehairedbaboons #globalization