“We probably would not have planes, trains, or automobiles if we had insisted on today’s safety levels during the early days of those technologies’ development—likewise, we should have laxer safety standards for new emerging technologies.”
Worth reading this for many reasons. Don’t miss the bit about the need to change ideological commitments on the basis of rationally-arrived-at conclusions, for example. But that excerpt above is a great way to understand the concept of, and the importance of, opportunity cost.
“I want to make it clear that although enriched environment dominated the 20th century, IQ gains are not destined to persist like the law of gravity. Factors that were immediate triggers of IQ gains included more adults per child in the home, more and better schooling, more people at university, more cognitively demanding jobs, and better health and conditions of the aged. There are signs that these are beginning to show diminishing returns.”
The Flynn effect is one of the more interesting things you can learn about – and having learnt about it, it might interest you to know that the Flynn Effect may now be reversing.
“They’re having a fight about the wall except the wall is the English Channel: half of these people want to turn the English Channel into a wall to keep out their version of the Mexicans.” An interview with Anand Giridharadas about the perils of philanthropy. Worth reading, not necessarily to agree with everything he has to say, but to think about was in which he may be right.
“So, for example, if people don’t take into account the macro consequences of their borrowing, then they could borrow collectively at the same time, which might be rational from an individual perspective but that collective borrowing leads to future problems such as a foreclosure problem that has spillovers for everyone in the economy. When people borrow individually, they may not take into account those spillovers. And so, again, from a macro perspective, people might over-borrow.For all of these reasons, a possible result conceptually is that if and when credit expands, it is possible for households to over-borrow, to overstretch from a macro kind of social perspective. And that over-borrowing, that overstretching during the boom phase of the credit cycle, can then come back to hurt on the downside and lead to a deeper recession than it would otherwise have been.”
This much is straightforward for a student of macroeconomics – but the rest of the interview with Atif Mian is worth reading for how he teases out the mechanisms of thinking about the follow-up questions in the context of today’s economy. If you want to learn how to think like a macro-economist, this interview will help.