Ec101: Choices matter!

We’ve, in our Thursday posts this year, learnt about incentives and costs. But, and this is a really, really big “but” – they become operational only when we live in a world where we’re able to choose.

Tyler Cowen and Alex Tabbarok – two people who have probably done more for educating people in economics than anybody else over the last thirty years or so – have written two of the best textbooks on economics available anywhere – one on micro and the other on macro.

In the book on microeconomics, they summarize ten different “big ideas” in economics: incentives, the invisible hand is the best kind of magic*, trade-offs matter, thinking on the margin matters, trade matters, wealth matters, institutions matter, business cycles are unavoidable, printing more money will lead to inflation and central baking is hard.

*I’ve paraphrased practically all of the big ideas, but this in particular is my phrasing, not theirs.

Two other asides before we proceed: in retrospect, it is interesting (at least to me) that at least one of their PhD’s (Tyler Cowen’s) and quite a few of their books are based literally on nothing more complicated than an exposition of these big ideas. There’s a lesson in there somewhere.

Also, they say that the biggest idea of them all is that economics is fun. I’d paraphrase that too: learning about the world is fun, and economics is a great tool to use towards that end.

Now, that allows for a neat segue to the topic du jour. At the very start of the book, even before the table of contents, they provide their definition of economics, one that I agree with wholeheartedly: economics is the study of how to get the most out of life.

Here’s the two word version: choices matter!

Unless we live in a society that is free to choose, at an individual level or otherwise, none of the other big ideas even come into play. So, to me, economics is first and foremost about being free to choose – and then about the benefits and costs of the choices that you make.

Which, I’d argue, means that learning about choices is plenty important. Ergo, this post.

  1. First things first. What is choice?
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    I chose (see what happened there?) this Quora post not because it is the “best”, but simply because it is so typical. Here’s what I think choice is: it is an admission of the fact that you can’t have everything. A particularly relevant example for me: what to eat from a buffet at a five star restaurant? With every passing year, “everything!” becomes an increasingly unrealistic answer. So choose those dishes that are likely to taste the best (maximizing happiness), or those dishes that are likely to cause the least harm (minimizing unhappiness) along some dimensions such as spiciness, oiliness or what have you.
    Or hey, do both at the same time! Choose the dish that is likely to taste the best and the dish that is likely to do the least harm. That’s half your micro paper right there – the rest is just math and diagrams. (I am kidding, of course, but only a little bit.)
    Choice is an admission of the fact that you can’t have everything, but that’s a good thing! It forces you to go with the best. Which paintings should you look at when you’re at the Louvre? “Every single one!” is unrealistic. Force yourself to choose, therefore, the very best of the lot. Constraints help you understand your own tastes better: aesthetics is, among other things, a matter of acknowledging the existence of constraints.
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  2. So having too many choices is a bad thing? It would seem so:
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    “It all began with jam. In 2000, psychologists Sheena Iyengar and Mark Lepper published a remarkable study. On one day, shoppers at an upscale food market saw a display table with 24 varieties of gourmet jam. Those who sampled the spreads received a coupon for $1 off any jam. On another day, shoppers saw a similar table, except that only six varieties of the jam were on display. The large display attracted more interest than the small one. But when the time came to purchase, people who saw the large display were one-tenth as likely to buy as people who saw the small display.”
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  3. But hang on. Of what use is an economics theory that doesn’t have a on-the-other hand angle? Tim Harford, as is so often the case, to the rescue.
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    “But a curious thing happened almost immediately. They began by trying to replicate some classic experiments – such as the jam study, and a similar one with luxury chocolates. They couldn’t find any sign of the “choice is bad” effect. Neither the original Lepper-Iyengar experiments nor the new study appears to be at fault: the results are just different and we don’t know why.”
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  4. And on a related note, have you heard of Herbert Simon and satisficing? This excerpt is from a Wikipedia article on Barry Schwartz’s book, The Paradox of Choice, but it is actually about Herbert Simon.
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    “A maximizer is like a perfectionist, someone who needs to be assured that their every purchase or decision was the best that could be made. The way a maximizer knows for certain is to consider all the alternatives they can imagine. This creates a psychologically daunting task, which can become even more daunting as the number of options increases. The alternative to maximizing is to be a satisficer. A satisficer has criteria and standards, but a satisficer is not worried about the possibility that there might be something better. Ultimately, Schwartz agrees with Simon’s conclusion, that satisficing is, in fact, the maximizing strategy.”
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  5. And the final word goes to Tyler Cowen. Or is it Herbert Simon all over again? Choices, choices.
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    “What if you asked people the following: do you wish to choose your own means of limiting your (subsequent) choices, or do you wish to let someone else, perhaps the government, do the work? I suspect the answers would overwhelmingly favor the former option, namely voluntary choice at the meta-level. And if you reexamine the experiments mentioned above, they are all about ways in which people voluntarily limit their own choices. Maybe you don’t wish to run your own cancer treatments, but you wish to choose the doctor who will.”

 

Ec101: Links for 9th January, 2020

Five articles on sunk costs today.

  1. First up, a somewhat basic introductory article. Feel free to skip it if you’re sure you know what sunk costs are (pausing only to note that it is not so much the knowing that matters with sunk costs, but remembering to apply it)
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  2. “The United States has invested much in attempting to achieve its objectives. In addition to the many millions of dollars that have been spent, many thousands of lives have been lost, and an even greater number of lives have been irreparably damaged. If the United States withdraws from Vietnam without achieving its objectives, then all of these undeniably significant sacrifices would be wasted”
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    The quote itself is a quote (if you see what I mean) from this paper, which is a wonderful rumination on sunk costs. Read Taleb on the subject (and not just his tweets!)
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  3. This entire post by Alex Tabarrok is very short (and I have linked to it before, I think), but it is worth reading. Especially the last sentence: do think about it, if you are an economics student.
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  4. “Once your model of choice is at all complex, no one knows what a sunk cost means any more. So a theoretical scolding of those who honor “sunk costs” is not completely well-defined. That being said, there is still the empirical question of whether most people attach too much weight to previous plans and have a status quo bias. The experimental evidence suggests that we are more rigid than we need to be. The propensity to honor previous commitments may have efficiency properties, but we cannot discard this proclivity when we ought to.”
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    The bottom line from Tyler Cowen’s post on the topic. He was responding to Tabarrok’s post above.
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  5. “Suppose that you are trying to pursue a morally worthy goal, but cannot do so without incurring some moral costs. At the outset, you believed that achieving your goal was worth no more than a given moral cost. And suppose that, time having passed, you have wrought only harm and injustice, without advancing your cause. You can now reflect on whether to continue. Your goal is within reach. What’s more, you believe you can achieve it by incurring—from this point forward—no more cost than it warranted at the outset. If you now succeed, the total cost will exceed the upper bound marked at the beginning. But the additional cost from this point is below that upper bound. And the good you will achieve is undiminished. How do the moral costs you have already inflicted bear upon your decision now?”
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    I am reminded, very strongly indeed, of the Mahabharata. That is the abstract of this paper.

Ec101: Links for 19th December, 2019

  1. “Based on the provided support, it is apparent then that it’s advantageous to be as random as possible for generation of ideas, but sticking with a particular response is predictive of creative originality. So next time your friends say that you are “sooo random,” hold your head up high and keep at it. But don’t forget to spot those brilliant ideas among the dis-order, and focus. Such is the recipe for creativity.”
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    On the benefits of being random.
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  2. “Convex functions play an important role in many areas of mathematics. They are especially important in the study of optimization problems where they are distinguished by a number of convenient properties. For instance, a strictly convex function on an open set has no more than one minimum. Even in infinite-dimensional spaces, under suitable additional hypotheses, convex functions continue to satisfy such properties and as a result, they are the most well-understood functionals in the calculus of variations. In probability theory, a convex function applied to the expected value of a random variable is always bounded above by the expected value of the convex function of the random variable.”
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    That is from the Wikipedia article on convexity, and the next sentence after the excerpt leads us to…
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  3. Jensen’s inequality!
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  4. “The point is subtle and widely misunderstood. Here’s a simple example. Suppose that the average return is 10%. If $100 is invested for two periods the average payoff is $100(1.1)^2=$121. But on average that is not what happens. More typically, you get say 0% in the first period and 20% in the second period, i.e. $100(1.0)*(1.2)=$120. Notice that the average return is exactly the same, 10%, but the total payoff is smaller in the second and more realistic case”
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    And Alex Tabbarok explain why Jensen’s Inequality matters
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  5. As does Nassim Nicholas Taleb.

Tech: Links for 10th December, 2019

  1. “To be clear, both roles can be beneficial — platforms make the relationship between users and 3rd-parties possible, and Aggregators helps users find 3rd-parties in the first place — and both roles can also be abused.”
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    The always excellent Ben Thompson on regulating monopolies online, drawing a distinction between platforms and aggregators. His articles, as I have mentioned before, are always a delight to read, and this one in particular is a great collection of links to articles he has written before. Plus, this article is inspiration, if you will, for the links that follow.
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  2. “Columbia University law professor Tim Wu coined the term “network neutrality” in a 2003 paper about online discrimination. At the time, some broadband providers, including Comcast, banned home internet users from accessing virtual private networks (VPNs), while others, like AT&T, banned users from using Wi-Fi routers. Wu worried that broadband providers’ tendency to restrict new technologies would hurt innovation in the long term, and called for anti-discrimination rules.”
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    An excellent explainer from Wired about Net Neutrality.
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  3. “For years, I winced at how Big Tech approached regulatory matters. When they wade into policy matters, they fail to see the bigger picture — and the younger the company, the worse they are at this. The hole that Facebook has dug for itself is entirely because its leadership seemed to believe that if they stayed within the letter of the current law they wouldn’t be regulated. This is a completely naive and ahistorical view. And this view has prevented Facebook from innovating in their own policy space. Without that policy innovation, we are left with essentially nonsensical suggestions to break up Facebook — which wouldn’t actually solve any of the issues anyone has with Facebook.”
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    If you’re looking to do research in this field, you can’t not read Joshua Gans. This is just one of many excellently argued articles. Do read the whole thing!
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  4. The internet activist Nikhil Pahwa lists out his expectations about the future of internet regulation in India. Agree or disagree (as usual, I fall in the middle), it is worth reading.
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  5. “More generally, however, the bigger Google gets the more countries it has a physical presence in (servers, sales staff and support etc.) and thus the more leverage individual countries, especially large countries, will have to degrade the services that Google offers not just within-country but to the world.”
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    Alex Tabarrok gives a fun example and a chilling analysis in the same short blog post.

Etc: Links for 15th November, 2019

  1. Bibek Debroy about Abhijit Banerjee’s father. This was fascinating!
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    “There were people who didn’t have an exceptional publication record. They were simply superb teachers.Dipak Banerjee was one of them. Except for a paper on utility he wrote while he was at LSE (London School of Economics), he rarely published. He was an exceptional teacher who produced exceptional students. Bhaskar Dutta, Subhashis Gangopadhyay, Dilip Mukherjee and Debraj Ray should be familiar names. They (all Dipak Banerjee’s students) edited a collection of essays in his honour in 1990. Mihir Rakshit primarily taught us macroeconomics and Dipak Banerjee primarily taught us microeconomics. Mihir babu’s teaching was precise. He never deviated from the topic. Dipak babu’s teaching was also precise, but he deviated from the topic and told us “stories”, especially at tutorials. In the course of these stories, we learnt he had two sons. He wasn’t worried about his younger son, who was “street smart”. But he worried about his elder son, who wasn’t that street smart. We learnt this elder son was called Jhima and that he had a middle name of Vinayak because he was born in Mumbai and because his mother (Nirmala Banerjee) was a Maharashtrian.”
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  2. A short article about the “perils” of Amazon Prime
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    “”Because of multiple Prime orders, Amazon has had to think more about packaging. Recognizing some customers’ “wrap rage,” they are using more bubble envelopes. Aware that the excessive space occupied by smaller inexpensive items increases transport costs, they’ve been developing algorithms that match box size to contents to avoid “over-boxing.” And they want manufacturers to know that online packaging needs to be compact rather than attractive.”
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  3. “We therefore predicted that reactivating previously unsolved problems could help people solve them. In the evening, we presented 57 participants with puzzles, each arbitrarily associated with a different sound. While participants slept overnight, half of the sounds associated with the puzzles they had not solved were surreptitiously presented. The next morning, participants solved 31.7% of cued puzzles, compared with 20.5% of uncued puzzles (a 55% improvement).”
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    Fascinating is an understatement – Alex Tabarrok on being productive while sleeping.
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  4. “For me, sleep is the #1 important factor for my cognitive productivity. I typically get between 6½–7¼ hours per night. Much less, and I feel my brain turning to goo when I try to do anything cognitively demanding. I track my sleep with a fitness tracker so I can anticipate when I should expect a “bad day” and plan accordingly.”
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    On the importance of sleep, and holidays. Please look up Jensen’s inequality as well.
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  5. “…music streaming subscriptions are typically far cheaper in emerging markets than they are in the US and Europe, but hardware built to play that music – often from the very same companies running the music services – is significantly more expensive.”
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    I pay 179 INR per month for Spotify – for six family members. INR 189 per month for YouTube Premium – for six family members.

Notes from Launching the Innovation Resistance by Alex Tabarrok

After Murali’s talk in Gokhale Institute the previous week, I got around to reading this book. What follows are some of the highlights from my reading of the book on Kindle, along with a quick review of the book.

Key takeaways (for me):

  1. Alex Tabarrok ends his own post on the book over on MR by saying “although we share a few common themes that perhaps due to differences in personality Tyler focuses on describing problems while I am more excited to promote solutions!”
    That comes through in both the title of the book as well as what I think is they key question for Tabarrok: “What combination of incentives and foundation will bring the greatest innovation to the modern world? How can we create a 21st-century Renaissance?”
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  2. “But there is also a more fundamental critique: After hundreds of years of experience, there is surprisingly little evidence that patents actually do promote the progress of science and the useful arts.”
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    This has been an eye-opener for me: both from Murali’s talk as well as this book. There just isn’t that much evidence that patents have worked.
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  3. “Firms innovate because they know that if they don’t, someone else will. In this kind of industry, instead of stimulating innovation strong patents may create a “resting on laurels” effect. A firm with strong patents may reduce innovation, secure in the knowledge that patents protect it.”
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    And it may actually be even worse! Patents may actually discourage innovation, let alone protect it.
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  4. “Overall, however, the ODA did create real innovation, and as the number of new drugs for rare diseases increased, the mortality rate for people with rare diseases fell.”
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    The Orphan Drug Act seems to have been one of the few things that can be used as an argument in favor of patenting.
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  5. “When asked to rate various sources of competitive advantage only 4 percent of corporate managers regarded patents as highly effective. Much more effective was getting a head start, learning by doing, and investing in complementary sales and service.”
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    “The aircraft patent-war slowed innovation in the American aircraft industry so much that just prior to World War I the government forced the industry to share its patents for reasons of national security.”
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    …were real eye-openers for me
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  6. So what might be the solution, if not patents?
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    “The major vice of a prize fund is that it replaces a decentralized process for rewarding innovation with a political process.” In this regard, you might want to read this book, by Peter Diamandis
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  7. “I see two views of humanity. In the first view, people are stomachs. More people mean more eaters and less for everyone else. In the second view, people are brains. More brains mean more ideas and more for everyone else.”
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    And patents, of course, are a way to restrict ideas.
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  8. “From Florence in the 14th century to Great Britain in the 19th and the United States in the 20th, the leading economic power has always been a leading educational power.”
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    Alex Tabarrok goes on to speak about the usual econometrician’s worries about a statement like that, but all that notwithstanding, this is exactly why India’s education standards (outcomes?) need to be way higher.

 

Overall, definitely recommended.

EC101: Links for 5th September, 2019

All five links from Marginal Revolution today, in relation to a talk that was held at the Gokhale Institute yesterday, by Murali Neelakantan. This is a topic that I am becoming more interested in, so you might see more posts about this topic.

  1. “It is less commonly recognized by the critics, however, that tougher IP protection may induce more foreign direct investment. Why for instance invest in a country which might subject your patents and copyrights to an undesired form of compulsory licensing?”
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    A typically Cowenian (and by that I mean contrarian) statement, and therefore also likely to be at least somewhat true. MR on Why TPP in IP law is better than you think.
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  2. “It’s hard to believe that the extension of copyright for decades after an author’s death can appreciably increase artistic creation and innovation, thus the public has gained little from copyright extension. What has been lost?”
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    Alex Tabarrok on the tragedy of the anti-commons.
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  3. “Patents are supposed to increase the progress of the useful arts.”
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    Are patents out of control?
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  4. “Walt Disney was long-dead when his copyright to Mickey Mouse was extended. Rumors to the contrary, Walt ain’t coming back no matter how much we incentivize him with a longer copyright.”
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    Alex Tabarrok is rather exasperated with copyright protectionism.
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  5. “How can we increase innovation? I look at patents, prizes, education, immigration, regulation, trade and other levers of innovation policy.”
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    Alex Tabarrok’s blog post on his book, “Launching the Innovation Resistance”

Ec101: Links for 4th July, 2019

  1. “I’m more worried about the part where the cost of basic human needs goes up faster than wages do. Even if you’re making twice as much money, if your health care and education and so on cost ten times as much, you’re going to start falling behind. Right now the standard of living isn’t just stagnant, it’s at risk of declining, and a lot of that is student loans and health insurance costs and so on.What’s happening? I don’t know and I find it really scary.”
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    An article that spanned an entire book (about which more below). But do read this article very, very carefully, especially if you think you really understand microeconomics.
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  2. “Here, for example, are two figures which did not make the book. The first shows car prices versus car repair prices. The second shows shoe and clothing prices versus shoe repair, tailors, dry cleaners and hair styling. In both cases, the goods price is way down and the service price is up. The Baumol effect offers a unifying account of trends such as this across many different industries. Other theories tend to be ad hoc, false, or unfalsifiable.”
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    A short excerpt from an article on the book that materialized from the article on Slate Star Codex above (and by the way, you might want to start following Slate Star Codex). I have linked to some of them already, but do scroll through to click on “Other posts in this series” to read them all.
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  3. “The 23 times increase in the relative price of the string quartet is the driving force of Baumol’s cost disease. The focus on relative prices tells us that the cost disease is misnamed. The cost disease is not a disease but a blessing. To be sure, it would be better if productivity increased in all industries, but that is just to say that more is better. There is nothing negative about productivity growth, even if it is unbalanced.”
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    An excerpt from an excerpt, admittedly, but still well worth your time, to help you understand why the cost disease isn’t really a disease. It’s all about productivity, and how it grows unevenly (and hey, that’s a good thing!)
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  4. “State intervention to fix market failures that preclude the emergence of domestic producers in sophisticated industries early on, beyond the initial comparative advantage.
    Export orientation, in contrast to the typical failed industrial policy of the 1960s–1970s, which was mostly import substitution industrialisation (ISI).
    The pursuit of fierce competition both abroad and domestically with strict accountability. ”
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    You really should be reading How Asia Works by Joe Studwell – everybody should read that book, and multiple times. But that being said, here is the TL;DR version.
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  5. “There doesn’t seem to be evidence that hiring from outside is better. What evidence does exist seems to be that internal hires get up the learning curve faster, and often don’t need as much of an immediate pay bump. If you persuade someone to leave their current employer by offering more money, what you get is a worker whose top priority is “more money,” rather than on work challenges and career opportunities. (“As the economist Harold Demsetz said when asked by a competing university if he was happy working where he was: `Make me unhappy.’”)”
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    Tim Taylor on the difficulty of hiring (and retaining) right.

EC101: Links for 27th June, 2019

  1. “Total Expense Ratio aka TER means cost incurred by a fund house to run a fund. It includes management fee, legal fees, registrar fee, custodian fee, distributor fee etc. The major part of the TER consists of management fee followed by distributor fee. The TER is calculated daily and will be deducted by AMCs on the same day, which means your NAV includes the impact of fees on your fund.”
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    A good article to help you understand how mutual funds make money, what the new SEBI regulations mean for retail investors, and how dependent the mutual funds are (as of now) on the distributor.
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  2. “…Say’s Law provides a theory whereby disequilibrium in one market, causing the amount actually supplied to fall short of what had been planned to be supplied, reduces demand in other markets, initiating a cumulative process of shrinking demand and supply. This cumulative process of contracting supply is analogous to the Keynesian multiplier whereby a reduction in demand initiates a cumulative process of declining demand. Finally, it is shown that in a temporary-equilibrium context, Walras’s Law (and a fortiori Say’ Law) may be violated.”
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    Econ nerds only – and perhaps the even stranger beasts called macro-econ nerds only. David Glasner gives us a view of Say’s Law that may actually be (gasp) Keynesian in nature.
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  3. “Why incentives? Economics is based on the premise that incentives matter. Incentives can help by increasing or decreasing the motivation to take up a certain activity, by changing the cost or benefit of the activity. If someone were to pay John enough for each time he hit his steps goal, he would likely begin walking, perhaps even enthusiastically. After all, health consequences are in the distant future, but cold, hard cash can be given in the present. ”
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    That is from this link – you’ll actually have to download and read the PDF. This excerpt is useful to me because it essentially says that behavioral economics is, well, economics.
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  4. “This view goes something like this – there are no priors (in fact, you discredit experience as being biased – after all you guys have been doing development for decades and we still have poverty and misery in abundance) >> and therefore conventions, latent wisdom, and experience counts for little >> therefore there are no theories >> so we need evidence on everything >> how better to create evidence than look for data >> so let’s do experiments (RCTs) or mine administrative data and understand reality and design evidence-based policies.”
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    Gulzar Natarajan is less than pleased with Raj Chetty’s new course at Harvard (the first item from 23rd May, 2019’s posting), and I am very inclined to agree with his views. Empiricism is slightly overrated today.
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  5. “The Baumol effect predicts that more spending will be accompanied by no increase in quality.
    The Baumol effect predicts that the increase in the relative price of the low productivity sector will be fastest when the economy is booming. i.e. the cost “disease” will be at its worst when the economy is most healthy!
    The Baumol effect cleanly resolves the mystery of higher prices accompanied by higher quantity demanded.”
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    Alex Tabarrok over on Marginal Revolution is on a spree with the Baumol Effect, and having followed his series, I’d say with good reason. It upends several things in microeconomics that we might have taken for granted.

EC101: Links for 20th June, 2019

  1. “One needs to be cautious in these type of businesses trading at higher multiples as slip in any one of the parameters – decline in sales and profit growth, build up of debt, deterioration in working capital, capital misallocation – wrong acquisitions and expansions will lead to derating of the stock quickly. The company has shown no signs of these as of now and investors need to keep a close look at these.”
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    A vastly under-rated skill among economics students. The theory of (and in this case also the application of) reading a balance sheet. Read this article to get a sense of how to read one – and in an ideal world, try to write a similar article about a firm of your choice.
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  2. “In other words, to quote Simon, “so long as the rate of interest remains constant, an advance in technology can only produce a rising level of real wages. The only route through which technological advance could lower real wages would be by increasing the capital coefficient (the added cost being compensated by a larger decline in the labor coefficient), thereby creating a scarcity of capital and pushing interest rates sharply upward.” In other words, the price of capital would have to rise by more than the price of consumption.”
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    Under what circumstances will advances in technology cause the real wage rate to go down? The vastly under-rated Herbert Simon provided an answer to this question way back when – read this article to find out its rediscovery.
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  3. “Now that the crisis is in the rearview mirror and the current expansion is nearing the longest on record, is it possible to go back to having a balance sheet as small as in 2007? The answer is no. The amount of currency in circulation has grown so much that it is not possible to shrink the balance sheet to its earlier size. This is good news because it reflects a growing economy. The larger balance sheet also reflects banks wanting to hold more reserves at the Fed. Banks partly hold these highly liquid and essentially risk-free assets to meet new liquidity regulations designed to improve the resilience of the overall financial system.”
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    A short, but useful essay about the huge expansion to the Federal Reserve’s balance sheet, and why it is unlikely to shrink anytime soon. A useful read for students of monetary economics.
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  4. “The correlation phrase has become so common and so irritating that a minor backlash has now ensued against the rhetoric if not the concept. No, correlation does not imply causation, but it sure as hell provides a hint. Does email make a man depressed? Does sadness make a man send email? Or is something else again to blame for both? A correlation can’t tell one from the other; in that sense it’s inadequate. Still, if it can frame the question, then our observation sets us down the path toward thinking through the workings of reality, so we might learn new ways to tweak them. It helps us go from seeing things to changing them.”
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    The phrase is burned onto my brain, as it is for everybody else who ever attended a statistics class. “Correlation is not causation” Sure, it isn’t – but this article warns us against the over-use of this phrase, and how it might have ended up making us not think deeper.
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  5. “The Baumol effect reminds us that all prices are relative prices. An implication is that over time prices have very little connection to affordability. If the price of the same can of soup is higher at Wegmans than at Walmart we understand that soup is more affordable at Walmart. But if the price of the same can of soup is higher today than in the past it doesn’t imply that soup was more affordable in the past, even if we have done all the right corrections for inflation.”
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    A short, but very readable interpretation of the Baumol effect – and as this excerpt makes clear, also a great reminder of the fact that all prices, everywhere and always, are relative.