Attention Economy


Sunday, December 31, 2023

State of Mississippi

The American South Is Booming. Why Is Mississippi Left Behind?
https://www.wsj.com/us-news/the-american-south-is-booming-why-is-mississippi-left-behind-eff0d986
Magnolia State struggles to find workers and stop brain drain 

Groupthink at the Fed

Pro Take: Dissenting Votes at the Fed Are Almost Extinct
https://www.wsj.com/articles/pro-take-dissenting-votes-at-the-fed-are-almost-extinct-4effa2f0
Consensus has become the norm among Fed officials who vote on monetary policy 

US-Israel Alliance: A Tricky Moment

The U.S. and Israel: An Embrace Shows Signs of Strain After Oct. 7
https://www.nytimes.com/2023/12/31/us/politics/us-israel-hamas-war.html
No other episode in the past half-century has tested the relationship between the United States and Israel in such an intense and consequential way as the Israel-Hamas war of 2023.

How Israel Could Lose America
https://www.foreignaffairs.com/united-states/how-israel-could-lose-america
Netanyahu Risks Letting the War in Gaza Jeopardize an Essential Alliance
 
The always controversial Stephen Walt (Renée Belfer Professor of International Relations at Harvard University):
It’s Time to End the ‘Special Relationship’ With Israel
https://foreignpolicy.com/2021/05/27/its-time-to-end-the-special-relationship-with-israel/
The benefits of U.S. support no longer outweigh the costs. 

Saturday, December 30, 2023

Will US Equity Market Outperformance Continue?

Decade-Long S&P 500 Bull Surge Is Running into a Valuation Wall
https://finance.yahoo.com/news/decade-long-p-500-bull-210046644.html
https://www.bloomberg.com/news/articles/2023-12-29/decade-long-s-p-500-bull-surge-is-running-into-a-valuation-wall
Equities outperform major asset classes over past decade. Repeat performance needs historic earnings, valuation growth.
 
Will emerging market equities play catch-up?
https://www.ft.com/content/7ce4d75e-4bc0-4e83-be75-0b743af3e247 

Economic Development – Philippines

Decades after independence, the Philippines lacks the kind of factory economy that has lifted up other Asian nations, tying millions to farm work.
https://www.nytimes.com/2023/12/30/business/philippine-economy-colonial-legacy.html 

Friday, December 29, 2023

Concerns Surrounding the Quality of Economic Data

Data Quality Is Getting Worse When We Might Need the Numbers Most
https://www.wsj.com/us-news/data-quality-is-getting-worse-when-we-might-need-the-numbers-most-749bd63d
Falling response rates contribute to fuzzier survey results

Economists May Have Been Flying Blind All Along
https://www.bloomberg.com/opinion/articles/2023-11-24/economists-may-have-been-flying-blind-all-along
Declining response rates to official surveys raise the possibility that government and central bank officials have been making decisions based on flawed data. 

Data Quality Is Still a Problem: Seasonal Distortions and Falling Response Rates

The problem with economic surveys: People aren’t filling them out
https://www.theglobeandmail.com/business/article-economic-surveys-statscan/


How Seasonality Affects Our View of Inflation, Jobs, as Explained with Hot Dogs
https://www.wsj.com/articles/how-seasonality-affects-our-view-of-inflation-and-jobs-as-explained-with-hot-dogs-8548ef68 

Survey Fatigue Threatens to Undermine US Economic Data
https://www.bloomberg.com/news/articles/2023-02-15/us-economic-data-threatened-by-survey-non-responses
Declining response rates on surveys conducted by US government agencies could have significant implications for financial markets.

Investing: Lessons from 2023

Wall St. Loves to Guess, but Nobody Knows What the Market Will Do in 2024
https://www.nytimes.com/2023/12/23/business/wall-st-loves-to-guess-but-nobody-knows-what-the-market-will-do-in-2024.html
So-called stock forecasts don’t deserve the name, our columnist says. Wall Street’s track record is horrendous.

‘Everyone Got Burned’: Wall Street Missed the Great Stock Rally of 2023
https://www.bloomberg.com/news/features/2023-12-29/wall-street-s-worst-investing-mistakes-of-2023-from-stocks-to-treasuries
 
What Did Wall Street Get Right About Markets This Year? Not Much
https://www.wsj.com/finance/stocks/what-did-wall-street-get-right-about-markets-this-year-not-much-7d4368fe
U.S. stocks end a topsy-turvy year near records, defying bearish predictions
 
How I, and Everyone Else, Got 2023 So Wrong
https://www.wsj.com/finance/how-i-and-everyone-else-got-2023-so-wrong-637d5f1d
To invest wisely in 2024, we have to decide why the economy defied expectations 

Alliances and Conflicts in the Middle East - A Historical Perspective


The Medicis of the Middle East?
https://www.foreignaffairs.com/united-arab-emirates/medicis-middle-east
How the United Arab Emirates Is Plotting Its Rise

An Extraordinary Introduction to the Birth of Israel and the Arab-Israeli Conflict
https://youtu.be/fT7uLSLunL0 

Thursday, December 28, 2023

Is the US economy outperforming Europe?

UK Economy - Short-Term and Long-term Challenges

Britain desperately needs a growth strategy
https://www.ft.com/content/02e96217-0e26-4e1b-b730-4e2d2f7972d1
 
Britain needs a way out of economic stagnation
https://www.ft.com/content/ba5dcd88-6c55-4053-bfdb-fb2552f4d61d
 
An ageing population is no excuse for low growth
https://www.telegraph.co.uk/business/2023/12/28/ageing-population-no-excuse-for-low-growth/
 
Low unemployment is a mirage explained only by mushrooming disability benefit
https://www.telegraph.co.uk/business/2023/12/27/britain-low-unemployment-mirage-disability-benefit/

Ending Stagnation: A New Economic Strategy for Britain (Resolution Foundation)
https://economy2030.resolutionfoundation.org/wp-content/uploads/2023/12/Ending-stagnation-final-report.pdf

Back to the Mid-1990s?

Soft Landing Talk Prompts 1990s Flashbacks
https://www.wsj.com/finance/investing/soft-landing-talk-prompts-1990s-flashbacks-ef10366f
A soft landing for the U.S. economy in 1995 was followed by a boom. Could it happen again? 

The Fed’s Remarkable Feat
https://www.project-syndicate.org/commentary/fed-monetary-policy-near-perfect-humbling-for-commentators-on-all-sides-by-j-bradford-delong-2023-12
When it comes to the lessons of history, current economic fundamentals, and the broader macroeconomic outlook, there is plenty for monetary-policy watchers to debate. But all should be able to agree that the US Federal Reserve has carried out an exceedingly difficult task almost perfectly.

Wednesday, December 27, 2023

The Chinese Yuan and the Dollar Standard

How China Manages Its Currency—and Why That Matters
https://www.wsj.com/finance/currencies/how-china-manages-its-currencyand-why-that-matters-322cbc04
It isn’t just about economics. The yuan has a political and psychological importance too.
 
The Yuan Is Finally Showing Some Muscle in International Trade
https://www.bloomberg.com/opinion/articles/2023-12-07/yuan-shows-some-muscle-increases-share-of-global-trade 

How Xi Jinping is challenging dollar dominance with landmark Saudi deal
https://www.telegraph.co.uk/business/2023/12/24/xi-jinping-china-dollar-dominance-saudi-arabia-deal/
Growing alliance between Beijing and Riyadh threatens to topple American hegemony
 
The US is ready to impose sanctions on foreign financial institutions when others don’t
https://www.ft.com/content/f1fe5ece-323c-401f-870b-cd45c92bf84a 

Tuesday, December 26, 2023

India's Stock Market Boom

The Newest Get Rich Quick Trade: Indian Stocks
https://www.wsj.com/finance/stocks/the-newest-get-rich-quick-trade-indian-stocks-aa83eb4c
Equity market is trading around all-time highs, with investors rushing to IPOs 

Rethinking the Impact of Mongolian Empires

The Mongol Hordes: They’re Just Like Us
https://www.newyorker.com/magazine/2024/01/01/empires-of-the-steppes-the-nomadic-tribes-who-shaped-civilization-kenneth-harl-book-review
Scholars now argue that early nomadic empires were the architects of modernity. But do we have the right measure of their success?
 
Manvir Singh:
The people of the Yamnaya culture were the first to take advantage of the new technologies and dominate much of the steppe. Starting north of the Black Sea about 3000 B.C., they used horses and wheeled carts to traverse astounding distances; geneticists have found second cousins buried almost nine hundred miles away from each other. They and their descendants also spilled into Europe, India, the Near East, and western China, as Harl, a professor emeritus of history at Tulane, recounts at the beginning of “Empires of the Steppes.” The Yamnaya tongue is one of the earliest offshoots of Proto-Indo-European, and an ancestor of such languages as Greek, German, English, Spanish, Old Celtic, Russian, Persian, Hindi, and Bengali. (Today, more than three billion people speak an Indo-European language.) Roughly seventy per cent of us have some Yamnaya ancestry in our DNA. More than the Greeks, the Romans, or the Chinese, it’s the nomadic Yamnaya whose legacy survives in our words and our bodies. 

 

Job Losses in the Financial Sector

Banks shed 60,000 jobs in one of worst years for cuts since financial crisis
https://www.ft.com/content/cbc6e15d-3c63-49af-9f98-ef8f478431bd
Trend set to continue over coming year amid subdued dealmaking and listing activity 

Economic Forecasting and Recession Calls

How Were So Many Economists So Wrong About the Recession?
https://www.bloomberg.com/opinion/articles/2023-12-26/what-recession-how-so-many-economists-got-it-so-wrong
Fears of a recession are fading fast, but the debate over the flaws of economic forecasting is just beginning. 
Tyler Cowen:
There is a reason that so many economists had been predicting a recession — and it is not because they are out of touch, or repeating talking points from Donald Trump’s presidential campaign. They predicted a recession because that is what experts such as Yellen, Krugman, Romer and many others had been teaching for decades. I do not myself presume to have any immunity from the general confusion here, as all along I thought there was a reasonable chance of a recession.
Lawrence Summers turned out to be wrong in predicting that disinflation would have huge costs in terms of employment and output, and now he is catching grief for this on social media. Yet at least he was drawing upon a consistent model. The problem is that the real world is not as consistent as model builders might like.
The solution here is not to sweep past doctrine under the rug; it’s to be more forthright. Macroeconomists very often don’t know what is going on, and that holds true for all the different styles and flavors of macro.



Wall St. Loves to Guess, but Nobody Knows What the Market Will Do in 2024
https://www.nytimes.com/2023/12/23/business/wall-st-loves-to-guess-but-nobody-knows-what-the-market-will-do-in-2024.html
So-called stock forecasts don’t deserve the name, our columnist says. Wall Street’s track record is horrendous.

Sunday, December 24, 2023

Hypercars

The World’s Fastest Road Cars—and the People Who Drive Them
https://www.newyorker.com/magazine/2023/12/25/the-worlds-fastest-road-cars-and-the-people-who-drive-them
“Hypercars” can approach or even exceed 300 m.p.h. Often costing millions of dollars, they’re ostentatious trophies—and sublime engines of innovation. 

Tennyson on Aging

Ulysses by Alfred Tennyson
https://www.poetryfoundation.org/poems/45392/ulysses

I am a part of all that I have met;
Yet all experience is an arch wherethro'
Gleams that untravell'd world whose margin fades
For ever and forever when I move.
How dull it is to pause, to make an end,
To rust unburnish'd, not to shine in use!
As tho' to breathe were life! Life piled on life
Were all too little, and of one to me
Little remains: but every hour is saved
From that eternal silence, something more,
A bringer of new things; and vile it were
For some three suns to store and hoard myself,
And this gray spirit yearning in desire
To follow knowledge like a sinking star,
Beyond the utmost bound of human thought.

Old age hath yet his honour and his toil;
Death closes all: but something ere the end,
Some work of noble note, may yet be done,
Not unbecoming men that strove with Gods.
The lights begin to twinkle from the rocks:
The long day wanes: the slow moon climbs: the deep
Moans round with many voices. Come, my friends,
'T is not too late to seek a newer world.
Push off, and sitting well in order smite
The sounding furrows; for my purpose holds
To sail beyond the sunset, and the baths
Of all the western stars, until I die.
It may be that the gulfs will wash us down:
It may be we shall touch the Happy Isles,
And see the great Achilles, whom we knew.
Tho' much is taken, much abides; and tho'
We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.  

Can Malaysia Escape the Middle-Income Trap?

Problems Facing Harvard

Saturday, December 23, 2023

The Value of Elderly Workers

OK, boomer: An intergenerational fight for jobs is looming
https://www.theglobeandmail.com/business/commentary/article-ok-boomer-an-intergenerational-fight-for-jobs-is-looming/
GUS CARLSON:
Sports coaches know well the gut-wrenching feeling of being under pressure to make the right decision when victory hangs in the balance: Do you call on the experienced player who may have lost a step but has been in tight spots before or the energetic young hotshot with a knack for finding new ways to win? It’s a tough call. But when the stakes are high, experience and expertise may trump energy and enthusiasm.
There are many factors behind the silver generation’s comeback. People are living longer, healthier and more productive lives. Technology has made a much higher percentage of jobs accessible to older people. The decline of strenuous manual labour, even in factories, where robots have taken over much of the heavy lifting, has been a boon for those who may not have the strength or flexibility they once had.

Forever Renters

The Rise of the Forever Renters
https://www.wsj.com/economy/housing/the-rise-of-the-forever-renters-5538c249
Americans who would traditionally be homeowners are instead renting. They’re sparking new kinds of neighborhoods, changing savings patterns—and even buying different light fixtures. 

Rise of Second-Tier Cities

Tech Hubs Are Losing the Talent War to Everywhere Else
https://www.wsj.com/tech/personal-tech/smaller-tech-hubs-rise-of-the-rest-6c2b142f
As the tech industry grows up, talent and funding are spreading out. That’s bolstering smaller cities all across the country. 

Think it’s impossible to revive a downtown? Look at Cleveland.
https://www.washingtonpost.com/opinions/interactive/2023/cleveland-downtown-empty-offices-transform/
The Ohio city shows that transforming America’s downtowns into a mixed-use neighborhood is possible. 

A Fiscal Stimulus Disaster

How a ‘Well-Intentioned’ Tax Credit Became a Colossal Mess
https://www.wsj.com/politics/policy/pandemic-tax-credit-went-wrong-b25ab03a
Employee-retention credit has cost the government about four times as much as expected—and counting 

The Employee Retention Tax Credit Is the Biggest Covid Scam
https://www.wsj.com/articles/employee-retention-tax-credit-covid-congress-irs-employers-6c72e9c1
The pandemic tax break was supposed to cost $55 billion. The bill so far: $230 billion, and rising.

The Consequences of Kissinger's Policies

Kissinger's corrosive legacy still weighs on U.S. policy in Asia
https://asia.nikkei.com/Opinion/Kissinger-s-corrosive-legacy-still-weighs-on-U.S.-policy-in-Asia
Strategy of aiding China's rise has come back to bite Washington and its allies 

Claudia Goldin - 2023 Nobel Prize Lecture

2023 prize lecture in economic sciences | Claudia Goldin

India - Economic Outlook

IMF Staff Report on India – Dec 2023
https://www.imf.org/-/media/Files/Publications/CR/2023/English/1INDEA2023001.ashx
India is on track to be one of the fastest growing major economies in the world this year, underpinned by prudent macroeconomic policies. Nonetheless, the economy is facing global headwinds, including a global growth slowdown in an increasingly fragmented world. 

Investors favour India over China as world’s second biggest economy stutters
https://www.telegraph.co.uk/business/2023/12/23/investors-favour-india-as-china-economy-stutters/

India Is Chasing China’s Economy. But Something Is Holding It Back.
https://www.nytimes.com/2024/01/02/business/india-economy-foreign-direct-investment.html
Long-term investment in India by businesses is stagnant, and foreign money is falling, even as the government is driving growth with infrastructure spending.

The GeoGuessr World Cup

If you were given a Google Street View image of anywhere on Earth, could you identify the location?
https://www.theguardian.com/lifeandstyle/2023/dec/23/geoguessr-world-championships-2023-inside-story
The competitors at the GeoGuessr World Cup can do just that. The clues are in brick houses, distinctive trousers and unusual telegraph poles 

Friday, December 22, 2023

Law and Politics

The lawfare state
https://www.newstatesman.com/world/americas/north-america/us/2023/12/trump-colorado-decision-lawfare-state
A court’s barring of Trump from running for president is the culmination of America’s dysfunctional reliance on the legal system. 

In 2024, U.S. domestic politics will cast a dark shadow across the world
https://www.washingtonpost.com/opinions/2023/12/15/us-dysfunction-chaos-china-russia-hamas/
America’s internal dysfunction has become a boon to its enemies.

Economic Challenges Facing China

China’s Self-Inflicted Economic Wounds by Takatoshi Ito
https://www.project-syndicate.org/commentary/china-growth-slowdown-driven-largely-by-policy-under-xi-jinping-by-takatoshi-ito-2023-11
By prioritizing security and stability – through surveillance, control, and coercion – over economic dynamism, China’s leaders are abandoning some of the policies and principles that underpinned the country’s “economic miracle.” Unless they change course, the entire global economy will suffer.

China’s Economic Engine Is Running Out of Fuel by Yi Fuxian
https://www.project-syndicate.org/commentary/flawed-demographic-and-growth-forecasts-guide-chinese-economic-policy-by-yi-fuxian-2023-12
Western observers tend to focus on criticizing the rhetoric and decisions of China’s leaders. But pointing out the errors in the forecasts on which China bases its policies – which typically fail to account for unfavorable demographic trends – may be more constructive.
 
Why Are So Many Young Chinese Depressed? By Nancy Qian
https://www.project-syndicate.org/commentary/china-youth-unemployment-depression-long-in-the-making-but-solutions-available-by-nancy-qian-1-2023-12
Growing disillusionment and depression among younger Chinese is not merely a symptom of the recent economic slowdown. In fact, the problem has been decades in the making, and owes much to China’s rigid education system, past fertility policies, and tight rural-urban migration restrictions.
 
How China Defeated Poverty by Arnaud Bertrand
https://americanaffairsjournal.org/2022/02/how-china-defeated-poverty/ 

Robert Solow - Founder of Modern Economic Growth Theory

Robert M. Solow, Groundbreaking Economist and Nobelist, Dies at 99

Solow's Seminar Papers/Early Contributions to Modern Growth Theory:
A Contribution to the Theory of Economic Growth (QJE, 1956)
http://www.jstor.org/stable/1884513
Technical Change and the Aggregate Production Function (The Review of Economics and Statistics, 1957)
https://www.jstor.org/stable/1926047
Technical Progress, Capital Formation, and Economic Growth (AER Papers and Proceedings, 1962)
https://www.jstor.org/stable/1910871

AEA Presidential Address: On Theories of Unemployment

Nobel Lecture: Growth Theory and After
Solow on Growth Theories:
Perspectives on Growth Theory (JEP, 1994)
https://www.aeaweb.org/articles/pdf/doi/10.1257/jep.8.1.45


Solow Interview - Freakonomics Podcast:

Robert Solow talks about the work of the future

Old MIT Interview

Demographics and Economic Growth

This Stat Could Transform How You View Economic Growth
https://www.wsj.com/us-news/this-stat-could-transform-how-you-view-economic-growth-266b1ec0
When focusing on working age instead of total population, Japan goes from laggard to leader. A lesson for all aging nations. 

The Wealth of Working Nations
https://www.nber.org/papers/w31914
Due to population aging, GDP growth per capita and GDP growth per working-age adult have become quite different among many advanced economies over the last several decades. Countries whose GDP growth per capita performance has been lackluster, like Japan, have done surprisingly well in terms of GDP growth per working-age adult. Indeed, from 1998 to 2019, Japan has grown slightly faster than the U.S. in terms of per working-age adult: an accumulated 31.9% vs. 29.5%. Furthermore, many advanced economies appear to be on parallel balanced growth trajectories in terms of working-age adults despite important differences in levels. Motivated by this observation, we calibrate a standard neoclassical growth model in which the growth of the working-age adult population varies in line with the data for each economy. Despite the underlying demographic differences, the calibrated model tracks output per working-age adult in most economies of our sample. Our results imply that the growth behavior of mature, aging economies is not puzzling from a theoretical perspective.

Thursday, December 21, 2023

The Complicated Economics and Politics of Migration

World governments now face a bigger predicament than the economy, stupid
https://www.telegraph.co.uk/business/2023/12/17/migration-biggest-political-issue-modern-age/
There are no easy solutions in the war between globalization and nativism

How migration is pushing Europe to the right
https://www.ft.com/content/aad0afd4-57cf-4d34-ae42-7397354600de
Growing public concern over asylum applicant numbers is bolstering once-fringe parties across the bloc
 
Migration debate roars to the forefront as Europe shifts to the right
https://www.washingtonpost.com/world/2023/12/20/eu-migration-deal/

Brexiteers Vowed to ‘Take Back Control’ of U.K. Borders. What Happened?
https://www.nytimes.com/2023/12/23/world/europe/uk-brexit-migration-sunak.html
Record numbers of legal immigrants came to Britain from outside the E.U. in recent years. Some on the right call that a “Brexit betrayal.”

The West’s ‘poisoning the blood’ moment

Can we talk about immigration?
https://www.theglobeandmail.com/business/commentary/article-its-time-for-honest-talk-about-our-broken-immigration-system/
Tony Keller:
What was so good about the old Canadian immigration system? It was a marriage of generosity and self-interest. It was about using the points system to choose immigrants according to the skills they brought to Canada. It was about recruiting future citizens, not minimum-wage guest workers.
And though Canada’s immigration rate in the three decades to 2015 was higher than most developed countries, Canada also had more stringent border control measures than most countries. We were very welcoming, and we were very selective.
Contradictory? No, complementary. It’s why Canadians – almost unique among Western countries – saw immigration as a net-positive. This carefully cultivated ecosystem was the result of a multigenerational consensus among Conservatives, Progressive Conservatives and Liberals. The Trudeau government has flattened it with a bulldozer.

‘Weapons of mass migration’: how states exploit the failure of migration policies
https://www.theguardian.com/world/2023/dec/14/weapons-of-mass-migration-how-states-exploit-the-failure-of-migration-policies
In her study, Greenhill argues that certain features of liberal democracies – including respect for rights and open democratic debate – make them particularly vulnerable to being played. However, we have seen in Libya and Turkey how the illiberal tendency of treating migration as a threat has been a key part of the game. Once fighting migration has come to be seen as a paramount political objective in destination states, and once huge resources are being spent on this endeavour, buffer states will spot vulnerabilities and opportunities to play on this perceived existential threat, selectively closing and opening the gates.


Inequality - A Global Perspective

Unprecedented?

The Myth of the Unprecedented
https://www.project-syndicate.org/commentary/forecasters-policymakers-must-accept-that-crises-are-the-norm-by-stephen-s-roach-2023-12
It is time to stop viewing crises as exceptional events and admit how frequently shocks actually occur. The task of forecasters and policymakers is not to predict the next catastrophe but to sharpen their focus on resilience – what it takes to stay the course with politically mandated policies while minimizing the inevitable dislocations.

History Matters

History weighs like a nightmare on the living if they are ignorant of basic facts
https://www.telegraph.co.uk/news/2023/12/20/the-living-is-ignorant-of-history/ 

Mitch Daniels in 2018:
“Presentism’s principal tributaries are a lack of knowledge and a deficient capacity for empathy. One of today’s premier historians has written that “historical illiteracy is the new normal.” How dismally true that is. The list of basic facts today’s Americans don’t know is too embarrassing and discouraging to repeat. The fundamental civic concepts of which majorities of both young and old are ignorant is equally appalling.
The quality of empathy, the ability to discern and understand the feelings of others, was denoted by Adam Smith as the most distinctive of human traits. Evidence of its erosion is everywhere these days, in the burgeoning cultural estrangement we now aptly call tribalism”

“The real sin that the absence of a historical sense encourages is presentism, in the sense of exaggerating our present problems out of all proportion to those that have previously existed. It lies in believing that things are much worse than they have ever been—and, thus, than they really are—or are uniquely threatening rather than familiarly difficult. Every episode becomes an epidemic, every image is turned into a permanent injury, and each crisis is a historical crisis in need of urgent aggressive handling—even if all experience shows that aggressive handling of such situations has in the past, quite often made things worse.”


Why Do We Think Learning About History Can Make Us Better?
How the study of the past became the conscience of the present.
https://www.chronicle.com/article/why-do-we-thinking-learning-about-history-can-make-us-better 

Wednesday, December 20, 2023

The 'Buy Now Pay Later' Trap

Americans May Be Taking on Too Much Pay Later ‘Phantom Debt’
https://www.nytimes.com/2023/12/20/business/economy/pay-later-credit-debt.html
Buying mattresses, clothes and other goods on installment plans has propped up spending, but economists worry that such loans could put some people at risk. 

The Pre-Pandemic Versus the Post-Pandemic Economy

Meet the New Economy, Just Like the Old Economy
https://www.wsj.com/world/asia/meet-the-new-economy-just-like-the-old-economy-b4969590
GDP, unemployment, even inflation look a lot like the prepandemic economy. The big changes are beneath the surface. 

South Africa's Electricity Crisis

Eskom: how corruption and crime turned the lights off in South Africa

Nature Conservation - The Indian Approach

Faith meets conservation in India's sacred spaces
https://asia.nikkei.com/Editor-s-Picks/Tea-Leaves/Faith-meets-conservation-in-India-s-sacred-spaces
Thousands of ancient cultural treasures now serve as biodiversity hot spots 

Tuesday, December 19, 2023

Interview - Angus Deaton

Angus Deaton on deaths of despair, randomized controlled trials, and winning the Nobel Prize
https://www.richmondfed.org/-/media/RichmondFedOrg/publications/research/econ_focus/2023/q4/interview.pdf 

The Fed and the Financial System

Why Central Banks Should (but Might Not) Keep the Market Flooded with Money
https://www.wsj.com/economy/central-banking/why-central-banks-should-but-might-not-keep-the-market-flooded-with-money-8f3caba0
Rate setters are under pressure to ditch the “floor system” they have used to steer monetary policy since the global financial crisis
 
Fed’s Newest Tool Has Become More Attractive on Rate-Cut Bets
https://www.bloomberg.com/news/articles/2023-12-19/fed-s-newest-tool-has-become-more-attractive-amid-rate-cut-bets 

The Federal Reserve Deserves a Pat on the Back
https://www.wsj.com/articles/the-federal-reserve-deserves-a-pat-on-the-back-reserve-liquidity-cash-c8bb8b8f
Paying interest on reserves allows the Fed to provide liquidity and maintain financial stability.

It’s time to reassess the ‘dark arts’ of central banks
https://www.telegraph.co.uk/business/2023/12/31/central-banks-must-reevaluate-monetary-dark-arts/
Economic policies look more like the result of wacky experiments than scientific theory

Smartphone/Technology Usage in Classroom and Student Performance

It Sure Looks Like Phones Are Making Students Dumber
https://www.msn.com/en-us/news/us/it-sure-looks-like-phones-are-making-students-dumber/ar-AA1lIX7i
https://www.theatlantic.com/ideas/archive/2023/12/cell-phones-student-test-scores-dropping/676889/
Derek Thompson:
The way I see it, for the past decade, the internet-connected world has been running a global experiment on our minds—and, in particular, on the minds of young people. Teens are easily distracted and exquisitely sensitive to peer judgment. Results from a decade of observational research have now repeatedly shown a negative relationship between device use and life satisfaction, happiness, school attention, information retention, in-class note-taking, task-switching, and student achievement. These cognitive and emotional costs are highest for those with the most “device dependence.” 

Ban smartphones from schools, says major UN report
https://www.telegraph.co.uk/news/2023/07/25/smartphones-school-classroom-ban-united-nations-unesco/
Report warns excessive mobile phone use is associated with poor educational performance and emotional instability
Related: https://www.unesco.org/gem-report/en/technology 

Arnold L. Glass & Mengxue Kang (2018), Dividing attention in the classroom reduces exam performance, Educational Psychology.
DOI: 10.1080/01443410.2018.1489046
ABSTRACT
The intrusion of internet-enabled electronic devices (laptop, tablet, and cell phone) has transformed the modern college lecture into a divided attention task. This study measured the effect of using an electronic device for a non-academic purpose during class on subsequent exam performance. In a two-section college course, electronic devices were permitted in half the lectures, so the effect of the devices was assessed in a within-student, within- item counterbalanced experimental design. Dividing attention between an electronic device and the classroom lecture did not reduce comprehension of the lecture, as measured by within-class quiz questions. Instead, divided attention reduced long-term retention of the classroom lecture, which impaired subsequent unit exam and final exam performance. Students self-reported whether they had used an electronic device in each class. Exam performance was significantly worse than the no-device control condition both for students who did and did not use electronic devices during that class.
 
The harmful effects of laptop usage in classrooms:
https://www.nytimes.com/2017/11/22/business/laptops-not-during-lecture-or-meeting.html
“At the United States Military Academy, a team of professors studied laptop use in an introductory economics class. The course was taught in small sections, which the researchers randomly assigned to one of three conditions: electronics allowed, electronics banned and tablets allowed but only if laid flat on desks, where professors could monitor their use. By the end of the semester, students in the classrooms with laptops or tablets had performed substantially worse than those in the sections where electronics were banned.”

Monday, December 18, 2023

2023 - A Year of Positive Economic Surprises

Everyone expected a recession. The Fed and White House found a way out.
https://www.washingtonpost.com/business/2023/12/18/recession-economy-inflation/
The economy’s strength and stability — defying even the most optimistic predictions — represent a remarkable development after seemingly endless crises. 

The economy defied the gloomy forecasts for 2023. Growth is steady, inflation is down, and wages are up.
https://www.wsj.com/articles/bidenomics-is-working-for-the-middle-class-b4e132a8

John Oliver on Elon Musk

Elon Musk: Last Week Tonight with John Oliver

Will Africa Realize a Demographic Dividend?

The world economy’s biggest problem is Africa
https://www.ft.com/content/178bdc1c-256b-475b-b7c1-a9f68df9f933
Countries across the continent have been unable to capitalise on their demographic dividend 

Sunday, December 17, 2023

Nashville's Economic Boom

Stocks and Bonds - Interesting Items

More Americans Than Ever Own Stocks
https://www.wsj.com/finance/stocks/stocks-americans-own-most-ever-9f6fd963
Pandemic, zero-commission trading ‘created a whole generation of investors’

Everyone knows stock market predictions are awful. So why make them and should investors care?
https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-everyone-knows-stock-market-predictions-are-awful-so-why-make-them-and/
Get it wrong and everyone forgets about it, because they know the track records are awful anyway. But there is also a professional playbook for deflecting blame that you’ll see once you know to look.
The top three excuses: 1. We were just early. Wait and see. 2. An unexpected event occurred during the year that wasn’t in our model. 3. We were wrong for the right reasons.

It’s the Magnificent Seven’s Market. The Other Stocks Are Just Living in It.
https://www.wsj.com/finance/stocks/its-the-magnificent-sevens-market-the-other-stocks-are-just-living-in-it-5d212f95
Big tech stocks have jumped 75% in 2023—and now make up about 30% of the S&P 500
 
Share buybacks are nice. But as a market signal, they’re terrible
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-manulife-share-buybacks/
But as a market-timing signal, buyback activity leaves a lot to be desired: Companies, in aggregate, often buy their own shares when prices are high and ignore buying opportunities when their stocks are cheap.
“Companies may believe they are buying low, but the evidence in support of managers successfully timing the market is at best mixed,” Ms. Bonaime said in an e-mail.
This is likely because stock prices and repurchases tend to rise when corporate earnings are high, she said. Companies often cut back on repurchases during recessions, when profits are down and hoarding cash may be necessary.
She added that stock options can also play a role here. Employees tend to exercise their options when share prices are high, pushing companies to initiate buybacks to combat the dilutive effect of issuing new shares.
 
Bond Market, Not Banks, Dominates a World of Looser Lending
https://www.bloomberg.com/opinion/articles/2023-12-17/credit-markets-risks-in-a-crisis-are-distorted-when-everyone-s-a-lender
Even strong believers in free markets worry that they’re distorting judgments and misdirecting credit. 

Saturday, December 16, 2023

For Math Lovers

 

Rethinking International Finance

The Debt Problem Is Enormous. Experts Say the System for Fixing It Is Broken
https://www.nytimes.com/2023/12/16/business/economy/imf-world-bank-sovereign-debt.html
Patricia Cohen:
This 21st-century clash of ideas about how to fix a system created for a 20th-century world is one of the most consequential facing the global economy.
The I.M.F. was set up in 1944 at a conference in Bretton Woods, N.H., to help rescue countries in financial distress, while the World Bank’s focus was reducing poverty and investing in social development. The United States was the pre-eminent economic superpower, and scores of developing nations in Africa and Asia had not yet gained independence. The foundational ideology — later known as the “Washington Consensus” — held that prosperity depended on unhindered trade, deregulation and the primacy of private investment…
The world today is geopolitically fragmented. More than three-quarters of the current I.M.F. and World Bank countries were not at Bretton Woods. China’s economy, in ruins at the end of World War II, is now the world’s second-largest, an engine of global growth and a crucial hub in the world’s industrial machine and supply chain. India, then still a British colony, is one of the top five economies in the world.

How a Plan to End Poor Countries’ Debt Crises Created a New One
https://www.wsj.com/economy/global/how-a-plan-to-end-poor-countries-debt-crises-created-a-new-one-102ca56e
Economists urged developing nations to borrow in their own currencies to erase the “original sin” of dollar debt. Now the blowback is beginning to mount.

China Turns the Tables on Wall Street
https://www.wsj.com/finance/china-turns-the-tables-on-wall-street-ed126a47
Beijing is ripping up the playbook for handling international debt defaults
 
World Bank Warns Record Debt Burdens Haunt Developing Economies
https://www.nytimes.com/2023/12/13/us/politics/world-bank-debt-developing-nations.html
Surging interest rates and waning financing options threaten a “lost decade” for poor countries.
 
How to Revitalize the World Bank, the IMF, and the Development Finance System
https://www.foreignaffairs.com/barbados/revitalize-world-bank-imf-development-finance-system-mia-mottley-raj-shah
 
International Debt Report 2023
https://openknowledge.worldbank.org/bitstreams/83f7aadd-dc5a-406b-98d4-9624e93993e5/download 

The Rise of Private Credit

Private Credit Is the Hot New Thing, But Its Roots Go Back to 1980s Junk Bonds
https://www.bloomberg.com/news/articles/2023-12-16/private-credit-is-the-hot-new-thing-on-wall-street
Risky debt fueled the rise of private equity firms, and now the buyout barons are doing the lending too 

Debating the Extent of US Inequality

Do we really live in an “age of inequality”?
https://www.vox.com/future-perfect/2024/1/11/23984135/inequality-auten-splinter-piketty-saez-zucman-tax-data
Why economists are reconsidering the scale of the rise in US inequality.

Clarifying America’s Great Inequality Debate
https://www.project-syndicate.org/commentary/inequality-different-metrics-but-larger-trend-still-a-problem-by-daron-acemoglu-2024-01
Technical debates about the nature and scale of income inequality are important, but they should not obscure what matters most in the story of the US economy. The mitigating effects of taxes and transfers do not change the fact that the market economy has been malfunctioning for the past 40 years.

Why economists are at war over inequality
https://www.economist.com/finance-and-economics/2023/11/30/income-gaps-are-growing-inexorably-arent-they
Related:
https://gabriel-zucman.eu/files/as-response-2023.pdf
https://davidsplinter.com/AutenSplinter-Tax_Data_and_Inequality.pdf
 
Consumption and Income Inequality in the United States since the 1960s
https://www.journals.uchicago.edu/doi/10.1086/721702
 
POLICY IMPLICATIONS:
Yes, Tax the Rich—and Also the Merely Affluent
https://www.bostonreview.net/articles/yes-tax-the-rich-and-also-the-merely-affluent/
For years the left has rallied around taxing the 1 percent, but this group is too narrow.
 
Wealthy Americans and redistribution: The role of fairness preferences
https://doi.org/10.1016/j.jpubeco.2023.104977
Abstract
We examine the attitudes of the wealthy towards government redistribution using a large and diverse sample of individuals from the top 5% of the income and wealth distribution in the U.S., as well as the remaining 95%. Three results stand out: (1) wealthy Americans have distinct fairness preferences, with a greater willingness to accept inequalities relative to the general public, (2) individuals who self-report having experienced upward social mobility and became first-generation wealthy are particularly accepting of inequality, while those born into wealth have fairness preferences similar to the general population; (3) the disparity in fairness preferences between the rich and the general public is predictive of greater opposition to redistribution among the wealthy, resulting in more conservative voting behavior. These findings provide new insights into the reasons behind the wealthy’s opposition to government redistribution. 

Friday, December 15, 2023

What Ails Higher Education?

Politics and Higher Education


The Moral Decline of Elite Universities

https://www.msn.com/en-us/news/opinion/the-moral-decline-of-elite-universities/ar-AA1lvRJo

What Universities Have Done to Themselves
https://www.wsj.com/articles/what-universities-have-done-to-themselves-antisemitism-hearing-dei-woke-history-abf4901b
Peggy Noonan:
Regular people used to imagine what a university looks like—rows of gleaming books, learned professors, an air of honest inquiry. That isn’t now a picture the public can see. Now it’s something else, less impressive, less moving. Less important to our continuance as a people.
The elites who run our elite colleges are killing their own status. They are also lowering the esteem in which college graduates are held. Your primary job as a student is taking in. You read, learn, connect this event with that, apply your imagination, empathize, judge. It is a spacious act—it takes time to absorb, reflect, feel—which is why you’re given four whole years to do it. But if the public senses that few are studying like independent scholars in there, not enough are absorbing the expertise of their field, that they’ve merely been instructed to internalize a particular worldview and parrot it back . . .
Well, if that’s the case, who needs them? Is it even worth having them around in the office? The people of a country have a greater stake in all this than universities and their students understand. And the elite schools are lowering their own standing more than they know.

Why university presidents are under fire
https://www.cnn.com/2023/12/08/opinions/israel-palestine-antisemitism-american-universities-zakaria/index.html
Fareed Zakharia:
American universities have been neglecting excellence in order to pursue a variety of agendas — many of them clustered around diversity and inclusion. It started with the best of intentions. Colleges wanted to make sure young people of all backgrounds had access to higher education and felt comfortable on campus. But those good intentions have morphed into a dogmatic ideology and turned these universities into places where the pervasive goals are political and social engineering, not academic merit.
As the evidence produced for the recent Supreme Court case on affirmative action showed, universities have systematically downplayed the merit-based criteria for admissions in favor of racial quotas. Some universities’ response to this ruling seems to be that they will go further down this path, eliminating the requirement for any standardized test like the SAT. That move would allow them to take students with little reference to objective criteria. (Those who will suffer most will be bright students from poor backgrounds, who normally use tests like the SAT to demonstrate their qualifications.)

Academic Administrators Should Keep Their Politics to Themselves
https://www.chronicle.com/article/everyone-just-shut-up-already
Stanley Fish:
The bottom line, then, is that academic freedom is not a general license to say whatever you like on any topic under the sun. It is a limited freedom to follow where the evidence pertaining to an academic question leads. It certainly does not include the freedom to advocate for your political views or turn (or try to turn) your students into social-justice warriors or anti-social-justice warriors. You and they are jointly engaged in an intellectual effort to understand something, and that engagement is, or should be, intensely focused and has no legitimate room for activities that belong to other enterprises. 

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Is it Necessary for Every High School Graduate to Attend College?

The Quantity versus Quality Debate
https://www.chronicle.com/article/some-students-are-smarter-than-others-and-thats-ok
Fredrik DeBoer, author of The Cult of Smart: How Our Broken Education System Perpetuates Social Injustice, notes:
To say that everyone should go to college presumes that everyone has the aptitude and desire to go to college. We have every reason to suspect that isn’t true. Already today, the national college-graduation rate tends to hover around 60 percent. And that’s among students who start college; the many millions who don’t attempt college are surely among those least likely to succeed in higher education. What would happen to the graduation rate if millions of people who previously did not attempt college were to flood our campuses? I have no doubt that some of them would flourish, but on balance we can certainly expect more dropouts, more remediation costs, more debt, and more stress on colleges that already struggle to graduate an adequate percentage of enrollees …It also strikes me that if the inevitable outcome of significantly greater college participation rates is lower standards, then our national response to hordes of new college students would be to make college significantly easier to get through.
 
Some Colleges Don’t Produce Big Earners. Are They Worth It?
https://www.nytimes.com/2022/08/20/business/college-graduate-earnings.html
A good place to start is studying available government data for any school you’re considering to see whether people who attended earn more than they would have if they had gone straight into the work force after high school.
At many schools, the answer is no. Three years ago, in an examination that should have received a lot more attention, the center-left think tank Third Way put all available data for all higher education institutions together. It found that at 52 percent of the schools, more than half of the enrollees were not earning more than the typical high school graduate six years after they began their studies. After 10 years, the figure was still 29 percent.

Worker Retraining and Skills Trade
https://vivekjayakumar.blogspot.com/2021/02/worker-retraining-and-skills-trade.html
 
Is the US higher education bubble about to burst?
https://thehill.com/opinion/education/590971-will-the-us-higher-education-bubble-finally-burst


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The Scourge of Grade Inflation

Nearly Everyone Gets A’s at Yale. Does That Cheapen the Grade?
https://www.nytimes.com/2023/12/05/nyregion/yale-grade-inflation.html
Others worried about Yale’s grade inflation becoming public knowledge. They feared it could cheapen their degrees — or obscure their hard work to skeptical employers.
“If Yale and other Ivy League institutions start getting these reputations for grade inflation, students who were already feeling pressured to get these high G.P.A.s will then feel that their work is sort of devalued,” said Gustavo Toledo, 20, a junior who is majoring in political science and hopes to go to law school. “This obviously doesn’t help,” he said. 
Related:
https://yaledailynews.com/blog/2023/11/30/faculty-report-reveals-average-yale-college-gpa-grade-distributions-by-subject/
https://yaledailynews.com/blog/2023/12/05/singh-the-real-value-of-an-a/ 

The Age of Coddling Is Over
https://www.nytimes.com/2020/04/16/opinion/coronavirus-medical-training.html
David Brooks:
But there has been one sector of American society that has been relatively immune from this culture of overprotection — medical training. It starts on the undergraduate level. While most academic departments slather students with A’s, science departments insist on mastery of the materials. According to one study, the average English class G.P.A. is above 3.3 and the average chemistry class G.P.A. is 2.78.”. 
“Over the past decades, a tide of “safetyism” has crept over American society. As Greg Lukianoff and Jonathan Haidt put it in their book “The Coddling of the American Mind,” this is the mentality that whatever doesn’t kill you makes you weaker. The goal is to eliminate any stress or hardship a child might encounter, so he or she won’t be wounded by it … It’s been a disaster. This overprotective impulse doesn’t shelter people from fear; it makes them unprepared to deal with the fear that inevitably comes. …

Mitch Daniels (Former Governor of Indiana and Former President of Purdue University):
“The challenge for today’s college admissions officer is like the one faced by corporate recruiters: In an era of rampant grade inflation, which grades can you believe? Businesses began learning years ago not to put much stock in diplomas from schools where the average graduate’s GPA is 3.5 or higher and may not be at all indicative of real learning or readiness for the modern workplace...
Many problems brought to our counselors are of social origin — loneliness, cyberbullying, just plain homesickness — but many others stem from academic anxiety, and small wonder. Freshmen who rarely saw a B during their K-12 years can be severely jolted when handed back a paper marked C. Too many participation trophies when growing up is lousy preparation for life at a reasonably rigorous university, let alone in the real world beyond.