Attention Economy
Friday, January 31, 2020
Short-Term Risks for the Global Economy
U.S. Manufacturing Titans Portend Gloom for the
Global Economy
How Bad Will the Coronavirus Outbreak Get?
Thursday, January 30, 2020
Economic Geography - The Case of South Bend
Is South Bend a Prosperous College Town or a
Struggling Rust Belt City?
California's Housing Crisis
California, Mired in a Housing Crisis, Rejects an
Effort to Fix It
“A lawmaker’s push for denser development near
transit, overriding local zoning, was thwarted by a diverse group of
legislative foes.”
Related:
Related:
Housing Economics 101:
Sen notes:
“In a normal market, a sharp decline in inventory
combined with a rise in prices would lead to a rapid increase in supply. If
there's a soybean shortage, for example, farmers will just plant more soybeans.
But the housing market is not like most markets. Supply is constrained for a
host of reasons. In desirable neighborhoods close to job centers, there's a
shortage of vacant land, strict zoning requirements and community resistance to
more housing construction. Farther out in the exurbs, where there's more land
available to develop, commutes are long and transportation options to jobs are
limited, which constrains demand. Even where there's plenty of buyer demand and
land to develop, homebuilders may be cautious about increasing production too
quickly, worried that they could get stuck with excess inventory if the market
slows”.
The Goldilocks problem of housing supply: Too
little, too much, or just right?
Tech, Risk Taking and the Labor Market
Young people are funneled into fields that don’t
reward risk-taking, leaving the U.S. economy less dynamic
https://www.bloomberg.com/opinion/articles/2020-01-30/old-people-have-all-the-interesting-jobs-in-america
The Robots Are Coming. Prepare for Trouble.
https://www.nytimes.com/2020/01/30/business/artificial-intelligence-robots-retail.html
Choice of College Major
Wednesday, January 29, 2020
Financial Sector - Future Trends
Sixteen Leading Quants Imagine the Next Decade in
Global Finance
The End of the Bonus Culture Is Coming to Wall
Street
Tuesday, January 28, 2020
Negative Rates in Europe
The risk behind negative-yielding bonds
The rich have had enough of negative interest
rates. Some are pulling cash out of Swiss banks
https://www.cnn.com/2020/01/23/investing/switzerland-cash-negative-rates/index.htmlUnderstanding Trump’s Economic Success
Explaining the Triumph of Trump’s Economic
Recklessness
Economist JEAN PISANI-FERRY notes:
“The Trump administration’s economic policy is a
strange cocktail: one part populist trade protectionism and industrial
interventionism; one part classic Republican tax cuts skewed to the rich and
industry-friendly deregulation; and one part Keynesian fiscal and monetary
stimulus. But it's the Keynesian part that delivers the kick.”
Monday, January 27, 2020
Size versus Quality of Government – What Matters More?
Interesting and insightful analysis of the role of
government in modern economies/societies:
Does the Government that Governs Least Really
Govern Best?
https://medium.com/@dolanecon/does-the-government-that-governs-least-really-govern-best-142106728cba
Freedom, Prosperity, and Big Government
Quality of Government, Not Size, Is the Key to
Freedom and Prosperity
HT:
The Party of the Left-Behind
How the G.O.P. Became the Party of the Left Behind
“Dayton, Ohio, typifies the forces that have pushed those
hurt by economic change toward the Republicans, while affluent places become
more Democratic”.
Recent Market Developments
A Trillion-Dollar Paradox Stalks the Stock Market
“The symptoms of mania and deep economic pessimism are
co-existing in the same market. Many stocks are in their own bear market, still
far off their highs, but a truly exciting growth company, or a truly reliable
high-quality company, will currently be prohibitively expensive.”
Oil Traders Made Billions in 2019 as Conflict Shook
the Market
New Risk to World Economy: Synchronized Housing
Slowdown
Investors at home and abroad are piling into American government debt
Sunday, January 26, 2020
Long-Term Economic Challenges
Prepare for Turbulence in Emerging Markets
Das notes:
“In a world of limited demand, irrespective of
leadership or ideology, governments everywhere face a mounting
anti-globalization backlash. Nationalist agendas and a shift to autarky –
closed economies – will persist. A return to strong growth in trade and
cross-border capital flows seems unlikely.”
China Virus Poses Longer-Term Economic Threat
Economic ‘Doom Loops’ Get Harder to Avoid in 2020s
Polarization in the World's Two Biggest Democracies
Why red and blue America can't hear each other
anymore
https://www.washingtonpost.com/outlook/2020/01/24/why-red-blue-america-cant-hear-each-other-anymore/
Why We're Polarized by Ezra Klein
America’s Sacred Politics
Political/Religious Polarization in India
Who Is an Indian?
What Happened to India?
BJP's Election Manifesto and Actual Policies
https://www.indiatoday.in/india/story/uniform-civil-code-to-all-india-nrc-modi-govt-plan-after-passing-caa-1629464-2019-12-18
More heat than light on the Citizenship Amendment Bill
https://www.livemint.com/opinion/columns/more-heat-than-light-on-the-citizenship-amendment-bill-11576419093457.html
https://www.indiatoday.in/india/story/uniform-civil-code-to-all-india-nrc-modi-govt-plan-after-passing-caa-1629464-2019-12-18
More heat than light on the Citizenship Amendment Bill
https://www.livemint.com/opinion/columns/more-heat-than-light-on-the-citizenship-amendment-bill-11576419093457.html
Saturday, January 25, 2020
Politics and Economics of Immigration
POLITICS OF IMMIGRATION
Why Hostility to Immigration Runs So Deep
Talented Immigrants Make the U.S. Richer, Not Poorer
Why Hostility to Immigration Runs So Deep
Noah Smith notes:
“Tilting the immigration system toward skilled workers, as Canada and other countries do, won’t just help keep government coffers flush — it might help preserve broad support for both immigration and the welfare state, even in the face of stubborn public misperceptions.”
Related:
https://www.dropbox.com/s/h06i3hze5oisnii/Alesina_Stantcheva_Redistribution.pdf?dl=0
Immigration and Politics
https://www.theatlantic.com/business/archive/2017/10/immigration-modern-liberalism/543744/
The Surprising Economics of Latino Immigration
HIGH-SKILLED IMMIGRATIONhttps://www.theatlantic.com/business/archive/2017/10/immigration-modern-liberalism/543744/
The Surprising Economics of Latino Immigration
Talented Immigrants Make the U.S. Richer, Not Poorer
Why Are Some Immigrant Groups More Successful than
Others?
Give Me Your Tired, Your Poor, Your High-Skilled Labor: H-1B Lottery Outcomes and Entrepreneurial Success
High-skilled immigration and the growing concentration of US innovation
Skilled Immigrants and Innovation
COMPETITION FOR GLOBAL TALENT
As immigrant techies shun the US, its neighbor has rolled out the red carpet
Increasingly, skilled techies look to Canada as US tightens immigration rules
Related:
Psychology Research - A Flawed Approach
The Problem Psychology Can’t Shake
“Over the past 10 years, psychology has undergone a
seismic change—just not exactly the one Henrich and others envisioned.
Researchers began to realize that, when they redid many major studies in the
field, they could not replicate the results. Shoddy experimental practices and
bad statistical habits, which helped to make random fluctuations in the data
seem like big, meaningful results, were largely blamed for this replication
crisis. But another and less frequently surfaced culprit, some psychologists
say, is the lack of diversity in the original research samples: Studies tested
in one population were simply not working in other populations.
… some reform-minded psychologists suggest, it can
seem as if the field continues to favor quick, flashy research over
conscientious improvements in study design. In many institutions, “the reward
structure is such where I would get ahead by publishing 20 crappy MTurk studies
instead of one big cross-cultural one,” says Gervais, the Kentucky
psychologist. “I don’t think we’d learn 20 times as much, but my CV would look
better.””
The weirdest people in the world?
https://www2.psych.ubc.ca/~henrich/pdfs/WeirdPeople.pdfFriday, January 24, 2020
Big Tech, Privacy and the Emergence of Surveillance Capitalism
You Are Now Remotely Controlled – Surveillance Capitalism
London Police Are Taking Surveillance to a Whole
New Level
Anger at Big Tech Unites Noodle Pullers and Code
Writers. Washington Is All Ears.
We Read 150 Privacy Policies. They Were an
Incomprehensible Disaster.
The Roots of Big Tech Run Disturbingly Deep
Tech Giants Amass a Lobbying Army for an Epic
Washington Battle
How Silicon Valley gamed the world's toughest
privacy rules
Related:
How one country blocks the world on data privacy
Big tech faces competition and privacy concerns in
Brussels
How Capitalism Betrayed Privacy
Columbia University Law Professor Tim Wu makes an
interesting point:
“The historical link between privacy and the forces of
wealth creation helps explain why privacy is under siege today. It reminds us,
first, that mass privacy is not a basic feature of human existence but a
byproduct of a specific economic arrangement — and therefore a contingent and
impermanent state of affairs. And it reminds us, second, that in a capitalist
country, our baseline of privacy depends on where the money is. And today that
has changed.”
Be Afraid of Economic ‘Bigness.’
“From a political perspective, we have recklessly
chosen to tolerate global monopolies and oligopolies in finance, media,
airlines, telecommunications and elsewhere, to say nothing of the growing size
and power of the major technology platforms. In doing so, we have cast aside
the safeguards that were supposed to protect democracy against a dangerous marriage
of private and public power.”
Economic Threat Posed by Rising Transaction Costs
America Is Getting Bogged Down in Hassles and
Kludge
Noah Smith notes:
“Transaction costs fall hardest on the poor and most
vulnerable in society. When you don’t have much money, any small hassle -- a
traffic stop, a late fee, a parking ticket — looms large compared with your scant
resources. Economist Sendhil Mullainathan has done research suggesting that
these aggravations and risks force poor people into a mindset of short-term
desperation that makes it very difficult to escape poverty.
There’s no simple solution to transaction costs.
Shifting away from capitalism offers no guarantee that life will be
streamlined; governments are notorious for creating mountains of red tape, as
anyone who has been to the Department of Motor Vehicles knows all too well, and
any socialist system would involve large amounts of regulation. Nor does
technology offer a silver bullet; the computerization of everything makes each
individual hoop easier to jump through, but that encourages companies and
governments to create new ones.”
Information, Transparency and Free Markets
Airfare Transparency Made the Free Market Freer
Cass R. Sunstein notes:
“The tale begins on Jan. 26, 2012, the effective date
of a regulation from the U.S. Department of Transportation requiring online
travel agents and air carriers to include all mandatory fees and taxes in their
advertised fares. 1 The regulation was influenced by research in behavioral
economics suggesting that when taxes are revealed separately from base prices,
consumers will underreact to them – and may end up losing a lot of money.
Known as a “full fare advertising rule,” the
regulation appears to be the first national mandate requiring tax-inclusive
pricing.
The economists Sebastian Bradley of Drexel University
and Naomi Feldman of Hebrew University of Jerusalem studied the effects of the
mandate. Their research is highly technical, but the basic lessons are clear:
Airline passengers have been big winners”.
Related:
--
Textbook conditions for perfect competition:
A perfectly competitive setting is typically
characterized by the following four characteristics:
- Firms sell a standardized product
- Firms are price takers
- Free entry and free exit (with perfectly mobile factors of production in the long run)
- Firms and consumers have perfect information
Thursday, January 23, 2020
US Federal Budget Deficits and Public Debt
A balanced perspective on the US budget deficits:
John Taylor - Restoring Fiscal Order in the United
States
Investors at home and abroad are piling into
American government debt
America’s debt spree isn’t stopping. It might soon
be too late.
Tuesday, January 21, 2020
Update on US and Global Economic Conditions
Tracking US Economic Conditions:
IMF WEO Jan 2020 Update:
A note on comparing GDP data across countries:
Monday, January 20, 2020
Career Advice for Economics Majors
The Best Jobs and Career Advice for Economics
Majors
What You Can Do with a Degree in Economics
GUIDE TO CAREER OPPORTUNITIES IN ECONOMICS
International Trade - KEY DEBATES [Updated]
As World Economy Shifts Gears, Trade Growth Slows
https://www.nytimes.com/2020/01/19/business/economy/davos-world-economic-forum-trade.html
THE CHINA SHOCK DEBATE:
THE CHINA SHOCK DEBATE:
An Update on the China Shock Debate
The Economist on the ‘China Shock’ Debate
The Truth About the China Trade Shock – WSJ
The China Shock
https://economics.mit.edu/files/12751MLK’s Trip to India
‘To India I come as a pilgrim’: Martin Luther King
Jr.’s remarkable trip to honor his hero
Racism in the US – While America has come a long way
since the 1960s, there is still progress to be made. See for instance:
Smoking-gun evidence emerges for racial bias in
American courts
Boeing - A Cautionary Tale
Shareholder value eclipsed safety as a top
priority, with catastrophic consequences.
Sunday, January 19, 2020
The 2020s - What Will the New Decade Bring?
Some Strategists Say Get Ready for ‘Peak Decade’
Economic forecasters got the 2010s wrong. What will
the next decade bring?
The Global Economy’s Luck May Run Out
https://www.project-syndicate.org/commentary/global-economy-outlook-2020-and-five-years-out-by-mohamed-a-el-erian-2019-12
As a Disorienting Decade Closes, a Perilous One Begins
https://www.nytimes.com/2019/12/11/opinion/western-democracies-china-russia-protests.html
As a Disorienting Decade Closes, a Perilous One Begins
https://www.nytimes.com/2019/12/11/opinion/western-democracies-china-russia-protests.html
Friday, January 17, 2020
China’s Long-Term Economic Challenges
Beijing is turning its back on the private sector,
a main driver of growth.
China’s Birthrate Hits Historic Low, in Looming
Crisis for Beijing
Thursday, January 16, 2020
Forecasts in Political Science
An interesting read:
Political science has its limits when it comes to
presidential prediction
DAVID SCHULTZ notes:
“The study of politics goes back to the Greek
philosophers Plato and Aristotle. Yet modern political science is a construct
of the post-World War II era, a response to the challenges of modern science ...
Looking at these accomplishments, some sought to make the study of government
and politics a science. A scientific study of politics meant building models
that could mathematically predict events, much like physicists or chemists can
calculate or predict molecular or chemical reactions. Prediction included the
concepts of description and explanation. This is what the “science” in
political science meant.”
US Economy and the 2020 Election
The Truth About the Trump Economy
Trump Fans or Not, Business Owners Are Wary of
Warren and Sanders
The Trouble with Housing
The West’s biggest economic policy mistake: Its
obsession with home ownership undermines growth, fairness and public faith in
capitalism
Housing is at the root of many of the rich world’s
problems
Related:
The Fed and the Repo Market
Implementing Monetary Policy in a Changing Federal
Funds Market
Understanding Recent Fluctuations in Short-Term
Interest Rates
How Did the Fed Funds Market Change When Excess
Reserves Were Abundant?
Big Banks and the US Repo Market Crisis
https://www.bloomberg.com/news/articles/2019-12-08/repo-blowup-was-fueled-by-big-banks-and-hedge-funds-bis-says
The Longer-Term Lessons of the Repo Turmoil
Repo Meltdown Shows Budget Deficit Has Limits
Wednesday, January 15, 2020
Drivers of Internal US Migration
Greenwich, Connecticut – No Longer an Attractive Destination for Financiers
https://www.economist.com/finance-and-economics/2020/01/09/why-so-many-of-americas-financial-elite-have-left-greenwich
The three states have seen an exodus, but it’s not all to Texas and it’s not all about taxes.
https://www.bloomberg.com/opinion/articles/2020-01-09/where-people-leaving-new-york-california-and-illinois-are-going
Why Your State Is Growing or Stalling or Shrinking
Growing Evidence of Climate Change
Floods exacerbated by climate change could destroy
Venice
The past decade was the hottest ever recorded, driven by past 5 years’ spiking temperatures
The past decade was the hottest ever recorded, driven by past 5 years’ spiking temperatures
Tuesday, January 14, 2020
Monday, January 13, 2020
Low Fertility Rates - Causes and Consequences
The Future of the City Is Childless
https://www.theatlantic.com/ideas/archive/2019/07/where-have-all-the-children-gone/594133/
Global Fertility Rate Declines
Global Fertility Rate Declines
https://www.bloomberg.com/graphics/2019-global-fertility-crash/
South Korea’s fertility rate falls to a record low
https://www.economist.com/graphic-detail/2019/08/30/south-koreas-fertility-rate-falls-to-a-record-low
China is facing problems associated with having too few young people. Despite the encouragement to have more children, most people now don’t want to expand their families. It all comes down to the economy.
https://www.washingtonpost.com/world/asia_pacific/beijings-one-child-policy-is-gone-but-many-chinese-are-still-reluctant-to-have-more/2019/05/02/c722e568-604f-11e9-bf24-db4b9fb62aa2_story.html
Related:
https://vivekjayakumar.blogspot.com/2019/02/demographic-shifts-and-future-of-mankind.html
South Korea’s fertility rate falls to a record low
https://www.economist.com/graphic-detail/2019/08/30/south-koreas-fertility-rate-falls-to-a-record-low
Hungary, Poland and others are offering subsidies
to raise birth rates, but their efforts have been futile.
https://www.washingtonpost.com/world/asia_pacific/beijings-one-child-policy-is-gone-but-many-chinese-are-still-reluctant-to-have-more/2019/05/02/c722e568-604f-11e9-bf24-db4b9fb62aa2_story.html
Related:
https://vivekjayakumar.blogspot.com/2019/02/demographic-shifts-and-future-of-mankind.html
Causes of State Failure - The Case of El Salvador
Once transnational gangs arrived in El Salvador,
large gaps in living standards emerged at the borders between their turfs
America's Role in El Salvador's Deterioration
Sunday, January 12, 2020
Water Scarcity - Challenges
In Nepal and many other countries, private tanker
operators profit from growing water scarcity.
https://www.nytimes.com/2020/01/11/business/drought-increasing-worldwide.html
Climate change and population growth are making the world’s water woes more urgent
An informative piece on the water supply challenges facing Bengaluru/Bangalore – India’s tech capital and one of the world’s fastest growing cities:
Climate change and population growth are making the world’s water woes more urgent
Interesting experiment in India:
https://www.thebetterindia.com/173853/bengaluru-ground-water-crisis-well-digging-day-zero-zenrainman/An informative piece on the water supply challenges facing Bengaluru/Bangalore – India’s tech capital and one of the world’s fastest growing cities:
Is Bengaluru heading towards Day Zero?
“In the 16th century, when the local chieftain Kempe Gowda founded Bengaluru, the bulk of the city’s water needs were supplied by over 1,000 lakes spread across an undulating terrain. Rainwater collected in each of these structures and the excess flowed into the one at the level immediately below it. This self-sustaining model was disrupted in the 1890s as the city began to expand, and piped water became its lifeline.
With the transformation of Bengaluru into India’s Silicon Valley over the last two decades, leading to massive population pressure (the city’s population is slated to grow by an incredible 124.4% between 2011-2031, according to the Bangalore Development Authority) and a real estate boom, the interconnected system of lakes has been broken. The lakes have been encroached on steadily to build houses, leading to the disintegration of the water ecology—the number of lakes has dwindled to 200-300.”State Capacity and Economic Performance
African governments are trying to collect more tax
State Capacity and Economic Performance
Saturday, January 11, 2020
Fiscal Cost of Military Adventures
Brown University study notes:
“Since late 2001, the United States has appropriated
and is obligated to spend an estimated $6.4 Trillion through Fiscal Year 2020
in budgetary costs related to and caused by the post-9/11 wars—an estimated
$5.4 Trillion in appropriations in current dollars and an additional minimum of
$1 Trillion for US obligations to care for the veterans of these wars through
the next several decades”
Reforming Democracies
Saving Democracy from the Managerial Elite
Can Ranked-Choice Voting Save American Democracy?
Friday, January 10, 2020
Labor Union Power - France versus US
France – Too Much Labor Union Power?
Macron’s Pension Reforms and the French Labor
Unions
Business Owners in Paris Say French Pension Reform
Strikes Have Been ‘Devastating’
US – Too Little Labor Union Power?
Time for a New Grand Bargain with American Workers
Related:
https://www.nytimes.com/2020/01/10/opinion/sunday/gig-economy-unemployment-automation.htmlThursday, January 9, 2020
Wednesday, January 8, 2020
The College Wealth Premium
The College Wealth Premium Has Collapsed
https://www.theatlantic.com/ideas/archive/2020/01/college-wealth-premium-collapsed/604579/
Is college still worth it? Read this study.
https://www.washingtonpost.com/business/personal-finance/is-college-still-worth-it-read-this-study/2020/01/10/b9894514-3330-11ea-91fd-82d4e04a3fac_story.html
Related:
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