Ec101: Links for 14th November, 2019

Four of one today, and one of the other.

 

  1. “In their new book, The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay, economists Emmanuel Saez and Gabriel Zucman challenge seemingly every fundamental element of conventional tax policy analysis. Given the attention the book has generated, it is worth stepping back and considering their sweeping critique of conventional wisdom. Spoiler: My goal here is to present these issues, not resolve them.”
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    William G. Gale on the public economics topic du jour, tax policy as per Saez and Zucman.
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  2. “I find this episode appalling, and I hope The New York Times is properly upset at having been “had.”#TheGreatForgetting”
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    Strong language from Prof. Cowen is an underrated signal by definition. He is less than happy about this article.
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  3. A Twitter thread that only econ nerds should read – but econ nerds really should read it.
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  4. And finally, another post about it from MR.
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    “”This is quite remarkable. If the sensible way of defining tax rates involves excluding transfers from the denominator (as they claim), the fact that it leads to very high rates by construction at the bottom should be because this is a sensible summary of reality. Yet, in their own words, it’s a problem. Rather than switching method, they drop the people at the very bottom which conveniently covers up the problem (but leaves a less severe version of the problem in their remaining lower income sample). Of course, they could have just used the standard definition which includes transfers in the denominator, but doing this destroys the entire headline result.”
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  5. And because we can all have more than our fair share of public economics and taxes, here’s Gulzar Natarajan wondering aloud, as he puts it, about the Indian economy.
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    “”Therefore public spending has to be tailored to maximise the boost to consumption and investment. In other words, it should seek to target instruments with the highest fiscal multipliers and target population or consumption groups with the highest marginal propensity to consume.”

Etc: Links for 8th November, 2019

  1. “Munch would have probably seen any marks from this period of the painting’s life as part of its artistic development. He wanted people to see how his works evolved and changed over their lifetime, and saw any damage they incurred along the way as a natural process, even leaving artworks unprotected outdoors and in his studio, stating ‘it does them good to fend for themselves’.”
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    I cannot for the life of me remember how I chanced upon this link – all that I remember is that it came out of an interesting Twitter thread. 10 factoids about The Scream.
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  2. “It’s called the “dinner party problem”: A table of four or fewer people may happily converse as one, but a party of five or more will splinter fairly quickly into separate conversations of two or three four people each. What is it about the number four?”
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    It really should be called the panel discussion problem. The conclusion to the short article deserves to be highlighted!
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    “It’s possible our brains evolved to manage only the conversations in which we have a chance of swaying the group to our side. Otherwise, what’s the point of talking?”
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  3. I’ll happily admit to the fact that the math is way beyond my capabilities – but it made for enjoyable viewing, if nothing else. The Mandelbulb, or the 3D version of the Mandelbrot set. This is via Navin Kabra, who should immediately be followed on Twitter.
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  4. “Are Indigenous and Western systems of knowledge categorically antithetical? Or do they offer multiple points of entry into knowledge of the world, past and present?”
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    A very interesting article in the Smithsonian on what is knowledge, and how is to be gleaned, understood and used.
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  5. A rather old, but nonetheless interesting article from Scroll on the Salim-Javed partnership breaking up.

EC101: Links for 7th November, 2019

  1. Idea Vodafone debt rating downgraded. Uh-oh.
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  2. “When Arun Sarin, Vodafone Group Plc’s India-born former CEO, was charting the British telecommunications firm’s expansion into emerging markets in the mid-2000s, his home country with more than a billion potential phone users seemed a compelling choice.Sarin wasn’t alone. Norway’s Telenor ASA, Russia’s Mobile TeleSystems PJSC and Malaysia’s Maxis Bhd were also among a slew of companies that flocked to this fast-growing market. The carriers banded with local partners, bid for airwaves and licenses, spending billions of dollars to prepare their networks.

    But what once appeared to be their most-promising Asian wireless market has turned sour. Vodafone’s Indian venture with billionaire Kumar Mangalam Birla, saddled with $14 billion of debt, is said to be seeking to revamp its borrowings amid mounting losses and a tariff war. Tycoon Sunil Mittal’s Bharti Airtel Ltd. is rated junk by Moody’s Investors Service. In a market that had a dozen carriers two years ago, just three are left standing today — two of them, barely.”
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    Here’s more context from Bloomberg.
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  3. “Notoriously high levels of pendency of cases discourage those with limited influence and resources from approaching the courts for justice. Police stations, especially those in rural areas, make registration of complaints and first information reports cumbersome to help them manage their strike rates. Some websites expect visitors to read privacy policies and indicate consent by checking specific boxes before letting them browse pages. The notice is sometimes in an unfamiliar language. Immigration applications involve onerous paperwork that is lengthy and confusing.”
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    Puja Mehra, author of the excellent “The Lost Decade” explains what sludge is, and why it matters in India
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  4. All incentives matter, but some incentives matter more than others. That’s the basic takeaway, but please, I beg you – take the time to read this article in full. Slate Star Codex is just utterly magnificent.
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  5. A fascinating article on the origins of the Amazon battery.

EC101: Links for 31st October, 2019

  1. “To make this easier to navigate, I’ve grouped the publications by one measure of influence, academic citations per year since publication. The categories are not indications of the quality of the research, just its academic influence to date. Within categories, I’ve ordered studies chronologically.”
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    A useful set of links: 100 of Michael Kremer’s most popular papers.
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  2. “Moreover, the key target of economic policy, Gross Domestic Product (GDP), doesn’t provide much help. So with a view to ‘remastering’ macroeconomics, in a new ING report, produced with the help of John Calverley, Carlo Cocuzzo and I investigate how GDP could be remixed. We pay particular attention to the impact of the rapid digitalisation of the economy that has been gathering momentum over the past 25 years. Pursuing the music analogy, our focus is on a digital remix of GDP.”
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    I’m not a big fan of the concept of GDP in the first place, but that being said, this article helps us understand how the digital economy might perhaps be underrated in national income.
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  3. “Nigeria, like other countries in sub-Saharan Africa, is facing a demographic boom. By 2050, its working-age population will have increased 125 percent. At current GDP growth rates, the local labor market will be unable to absorb all the new entrants. One way for Nigeria to reduce this pressure, and make the most of remittance and skills transfers, is to promote new legal labor migration pathways with countries of destination across the globe.”
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    A useful overview of the Nigerian labor market and how it might be made more effective Applies in part to India as well, I’d argue.
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  4. “Trouble is, the rescue is entirely fictional. The only reason it’s even being attempted is to delay — as long as possible — the collapse of this large shadow lender. Such an event, as S&P Global said in a rare show of plainspeak by a credit appraiser, could be powerful enough to deliver a “solvency shock” to India’s troubled banks. Neither the lenders, nor the Indian government, wants to contemplate this grim prospect. Hence, the make-believe restructuring.”
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    Andy Mukherjee explains the mess that is Dewan Housing. Not only is this not going to end well, I’d argue that there are a lot many more skeletons about to tumble out of the closet.
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  5. “The march of technology means oil’s days are numbered. And for the good of the planet, that transition has to happen as fast as possible. But it doesn’t mean the people who gave their lives to getting energy out of the ground should have to suffer.”
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    Noah Smith on the second order effects of the slowdown in demand for oil.

EC101: Links for 24th October, 2019

Five articles about spends during the festive season in India this year:

  1. “Whether government stimulus packages announced so far will have an impact on festive consumption is a big question. An even bigger question is whether consumers, who are coping with flat-lining incomes and a poor job market, will respond to the incentives offered by companies. If this Diwali fails to sparkle in terms of consumption demand growth, outlook for the next few quarters will get much gloomier.”
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    The ET explains the importance of the Diwali season sales for India’s economy. A useful set of charts.
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  2. “Sawai Makwana, 41, who runs a hair salon and a cafe in Jaipur, is a worried man. This will be my worst Diwali in nearly 30 years, he says. A third-generation hair stylist, Makwana says his business took its first hit in 2016, as a result of demonetisation. Matters have grown progressively worse since he has been forced to close down a section of his salon and sack 14 of his 16 employees. Male customers, who would spend an average of Rs 2,500, have either stopped coming or now just ask for a basic haircut that costs Rs 300, he laments.”
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    Always (always!) be wary of biased sampling and poorly researched articles – but here’s an article from India Today about the same topic.
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  3. TechCrunch on how Amazon and Flipkart are dealing with the crisis.
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  4. On the growth in Tier 2, 3 and 4 towns and how they impact these sales.
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  5. And circling back to the ET, early reports seem to indicate that things weren’t quite as bad as was being feared.

EC101: Links for 17th October, 2019

  1. “In order to combat global poverty, we must identify the most effective forms of action. This year’s Laureates have shown how the problem of global poverty can be tackled by breaking it down into a number of smaller – but more precise – questions at individual or group levels. They then answer each of these using a specially designed field experiment. Over just twenty years, this approach has
    completely reshaped research in the field known as development economics. This new research is now delivering a steady flow of concrete results, helping to alleviate the problems of global poverty.”
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    A simple primer on the work that Duflo, Benerjee and Kremer have won the Nobel Prize for.
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  2. “The first general comment is the idea of randomisation is hardly anything new for researchers who have studied or followed Indian development. The Planning Commission started something called Programme Evaluation Studies way back in 1954 which more or less studied the same thing. Agriculturists — both practitioners and researchers — have also used similar techniques of RCT to see what agricultural intervention worked.In my own research on banking history, I saw how Syndicate Bank started programmes on agricultural and rural development based on near similar ideas of randomisation. To be fair, the 2019 laureates have advanced these ideas using techniques from sampling, statistics, and econometrics to draw finer inferences.”
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    Amol Agarwal over at Moneycontrol points out a more nuanced understanding of both this year’s Nobel Prize as well as the Nobel Prize for Economics in general. Well worth reading!
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  3. The NYT profile on this year’s Nobel Prize.
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  4. “The significance of what Angrist and Pischke termed the “credibility revolution in empirical economics” can be seen in the John Bates Clark Medal awards given to researchers who participated in that revolution. Between 1995 and 2015, of the fourteen Clark Medal winners, by my estimate at least seven (Card, Levitt, Duflo, Finkelstein, Chetty, Gentzkow, and Fryer) are known for their empirical work using research designs intended to avoid the problems that Leamer highlighted with the multiple-regression approach.”
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    Mostly for those truly interested in economics, but Arnold Kling points out how more people should know about Ed Leamer.
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  5. Heavily, heavily recommended: this is the longer version of the first link above, again by the Nobel Prize committee itself.

EC101: Links for 10th October, 2019

  1. “Coase’s originality was not in his reasoning, but in recognizing that economic exchange is not the mere trading of physical goods but trading rights to property or rights to engage in certain types of conduct affecting property.”
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    Was Ronald Coase the first to come up with the Coase theorem?
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  2. “However, the joy of this book is less in the big picture than in the detail. And what a lot of it! The mind boggles at Smil’s extensive reading and absorption of information. We get the speed at which marathons are run – over the entire course of human history; the growth rates of piglets and weight of chicekns over time; sales of small non-industrial motors over time; the envelope for the maximum speed of travel; Kuznets cycles; Zipf’s law for city size…. The middle section of chapters offer a fantastic overview of technical progress over long periods in a wide range of technologies. I love all this detail.”
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    Diane Coyle thoroughly approves of Growth and Civilization.
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  3. “When a daughter is married, we do worry about her future. But why should I worry when the government of India is my son-in-law who married my daughter Syndicate Bank,” asked the late Tonse Madhav Ananth Pai in 1969, in the aftermath of the nationalization of the first-generation private-sector banks. Fondly known as “Brahma of Manipal”, Pai was the founding father of Syndicate Bank in 1925.”
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    A lovely read on bank mergers, bank nationalization and banks from a particular part of Karnataka.
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  4. “This is where the popcorn enters the picture. Pricey popcorn makes those lower ticket prices possible, And that is why you should buy popcorn at the movies.”
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    Expensive popcorn? Uh, no, cheap movie tickets. Yes, really. Cheap for whom, you ask? Welcome to microeconomics.
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  5. “This leads to the question: Why try these markets at all? This is quite similar to creation of super highways which help reach destinations much quicker but lead to accidents as well. Should we then not create highways?Policies always raise such trade-offs and hopefully, the regulator will take steps which minimise the negative aspect of creation of these markets.”
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    Amol Agarwal, in Moneycontrol, on securitization in real estate loans in India. Me, I think this is not such a great idea.