Grasping Reality on TypePad, by Brad DeLong

1. Clark Kerr is supposed to have said that the life of a Berkeley Chancellor is easy as long as: (1) the students are having enough sex, (2) the alumni are watching enough football, and (3) the faculty have enough parking. Now Carol Christ is discovering the consequences of what happens when (3) is not satisfied. And it is dire: rthe prospective tear-down of the Upper Hearst Parking Structure is a crisis!: Carol Christ: An Update on the Upper Hearst Project: "The campus’ plan to develop faculty housing and academic space on the site of the Upper Hearst parking lot is generating legitimate concerns and questions.... We continue to engage with our colleagues at the College of Engineering and the Goldman School of Public Policy.... We need to do a better job disseminating information about the project and its impacts.... We are sharing with all members of the Academic Senate the note below that was recently sent to the College of Engineering faculty by the Provost.... We will publish and distribute a comprehensive FAQ... provide ample opportunity for comment and feedback...

2. Marcella Alsan (2015): The Effect of the TseTse Fly on African Development: "The TseTse fly is unique to Africa and transmits a parasite harmful to humans and lethal to livestock. This paper tests the hypothesis that the TseTse reduced the ability of Africans to generate an agricultural surplus historically. Ethnic groups inhabiting TseTse-suitable areas were less likely to use domesticated animals and the plow, less likely to be politically centralized, and had a lower population density. These correlations are not found in the tropics outside of Africa, where the fly does not exist. The evidence suggests current economic performance is affected by the TseTse through the channel of precolonial political centralization...

3. I would put this more strongly. Trump and the Trumpists have absolutely no idea what they should be doing or are doing with respect to U.S.-China economic relations. And it shows: Tom Mitchell: Trump Had a Chance to Gain Greater Leverage Over China But Blew It: "Last spring a senior US executive complained to a government official about President Donald Trump’s... tariffs on imports from China.... The official had a pointed response: what leverage would the executive use to change Chinese approaches that have frustrated US businesses for decades, from forced technology transfers to state-directed industrial policies?... The executive had a three-letter answer: TPP, referring to the Trans-Pacific Partnership trade pact from which the US withdrew on Mr Trump’s first day in office...

4. Barry Eichengreen, Arnaud Mehl, and Livia Chițu: Mars or Mercury Redux: The Geopolitics of Bilateral Trade: "The pre-World War I period... whether trade agreements are governed by pecuniary factors... or by geopolitical factors.... We find that defense pacts boost the probability of trade agreements by as much as 20 percentage points. Our estimates imply that were the U.S. to alienate its geopolitical allies, the likelihood and benefits of successful bilateral agreements would fall significantly. Trade creation from an agreement between the U.S. and E.U. countries would decline by about 0.6 percent of total U.S. exports...

5. There is an argument that somebody who has built a food-processing and consumer-service business and met its payroll—like Herman Cain—should be on the Board of Governors of the Federal Reserve, in order to keep the staff and the other Governors reality-based in the sense that it would force them to explain themselves to somebody whose experience is in the real and not the financial economy. There is no argument that Herman Cain is the best businessman for the slot. There is no argument at all that Stephen Moore—whose qualification is having played an economist on TV, and being willing to dump whatever of his previous policy positions (free trade? TPP? gold standard? anything else?) over the side whenever his political masters demand—belongs on the Fed. And the pro-Moore pro-Cain pieces that are currently being planted are reduced to closing with "Moore and Cain would only be two of 12 FOMC votes". But Republicans—save Greg Mankiw and Ross Douthat—are in lockstep behind them. Well—almost in lockstep. Herman Cain is the stronger (not strong) candidate. Republican Senators Kevin Cramer (ND), Lisa Murkowski (AK), Cory Gardner (CO), and Mitt Romney (UT) are for Moore and against Cain. This identity politics stuff is killing America Jim Bianco: The Fed Would Benefit from Stephen Moore, Herman Cain: "Policymaking positions should help determine policy, not act as a rubber stamp for the staff or Chairman. They should hold divergent views, come from different backgrounds and be ready to explain themselves. Policy makers should be given the resources to flesh out their ideas. If confirmed, Moore and Cain would only be two of 12 FOMC votes. Their unique perspectives could make the Fed a stronger institution...

6. Ellora Derenoncourt: Atlantic Slavery’s Impact on European and British Economic Development: "The economics literature on Atlantic slavery attests to its negative long-run impact on development outcomes in Africa and the Americas. What was slavery’s impact on Europe? In this paper, I test the hypothesis that slavery contributed to modern economic growth in Europe using data on European participation in the Atlantic slave trade. I estimate a panel fixed effects model and show that the number of slaving voyages is positively associated with European city growth from 1600-1850. A 10% increase in slaving voyages is associated with a 1.2% increase in port city population. Using a newly created dataset on British port-level trade, I show that for the UK, this effect is distinct from that of general overseas trade, which also increased during this period...

7. BREXIT!!: Ian Dunt: Week in Review: The Frazzlfication Ends Now. For a Little Bit.: "On January 15th, Theresa May's Brexit deal was defeated by a historic margin. Immediately afterwards, Jeremy Corbyn called a no-confidence vote, which he lost. Then the Malthouse Compromise was born, as a kind of release valve for MPs' desperate stupidity. The government responded by whipping in support of its evil twin, the Brady amendment, and won, thereby sabotaging its own negotiating strategy. Labour published a new Brexit strategy, which looked suspiciously like Norway Plus but was different to it in ways they were unable or unwilling to describe. The government then proceeded to lose a vote on the policy which MPs had forced on it the week before, driving British politics into a kind of post-modern chasm in which David Lynch became the creative director of parliament. Then a group of Labour and Tory MPs split from the party to form the Independent Group. May announced she would request a dual extension of Article 50-short in the case of a deal and long if not. She later went back on this and requested only the short extension. She also secured an update to her deal with the Europeans which didn't really change anything. MPs promptly and unsurprisingly rejected it again. In response, the government put forward a convoluted motion on no-deal, whipped MPs to oppose an amendment which simplified it, lost, and had to therefore whip against its own motion even though it amounted to the exact policy it said it was pursuing anyway. Then anyone who still believed in parliamentary democracy decided maybe it wasn't such a great idea after all. Soon enough John Bercow popped up and refused to allow May to bring her deal back to the Commons a third time unless it was changed. May secured her first extension of Article 50, but then MPs passed an amendment taking control of the Brexit process, triggering a new bout of constitutional chaos. The Brexit process became a kind of executive dual carriageway, with the government pursing one strategy and parliament another. In a bid to get MPs to back her deal, May offered her own resignation as an incentive, seemingly oblivious to how logically and morally broken that was as a strategy. MPs, for their part, held a series of indicative votes and found no majority. May stripped her deal in two to get it past Bercow, put it before the Commons again, and lost again. MPs held more indicative votes and still could not find a majority. Pitiful broken toys scattered everywhere. May announced she would seek another Article 50 extension. Parliament passed a bill, independently of government, forcing her to do the thing she said she would do, given that her reputation for reliability at this stage was frankly not what it was. And then, finally, the EU offered an extension to October 31st. And now here we are. Three months later and about twelve hundred years older...

8. Mark Thoma: Economist's View: Links (4/12/19): "Purity vs. Pragmatism, Environment vs. Health... Krugman. Bad News for IV Estimation....Keep the Federal Reserve I Love Alive-Greg Mankiw. Peaceful Coexistence 2.0-Dani Rodrik...

9. Marshall Burke, Lauren Falcao Bergquist, and Edward Miguel: Sell Low and Buy High: Arbitrage and Local Price Effects in Kenyan Markets: "Small-scale farmers are commonly observed to “sell low and buy high,” rather than the reverse. In a field experiment in Kenya... credit market imperfections.... Timely access to credit... increasing farm revenues and generating a return on investment of 29%.... In contrast to existing experimental work, the results indicate a setting in which microcredit can improve firm profitability, and suggest that GE effects can substantially shape microcredit’s effectiveness. In particular, failure to consider these GE effects could lead to underestimates of the social welfare benefits of microcredit interventions...

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