Links for 26th April, 2019

  1. “The world economy desperately needs a plan for “peaceful coexistence” between the United States and China. Both sides need to accept the other’s right to develop under its own terms. The US must not try to reshape the Chinese economy in its image of a capitalist market economy, and China must recognize America’s concerns regarding employment and technology leakages, and accept the occasional limits on access to US markets implied by these concerns.”
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    Dani Rodrik explains the need for, as he puts it, peaceful coexistence – between China and the USA. My money is on this not happening: history, current affairs and game theory are my reasons for being less than optimistic.
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  2. “Yes, there was arsenic in Bangladesh’s wells, and it may have posed a health threat. But in areas where people were encouraged to switch away from the wells, child mortality jumped by a horrifying 45 percent — and adult mortality increased too. It turns out that the alternatives to the wells, for most people in Bangladesh, were all worse — surface water contaminated with waterborne diseases, or extended storage of water in the home, which is also a major disease risk.”
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    Unintended consequences is one of the most underrated phrases in economics.
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  3. “Only one of Murdoch’s adult children would win the ultimate prize of running the world’s most powerful media empire, but all four of them would ultimately have an equal say in the direction of its future: Murdoch had structured both of his companies, 21st Century Fox and News Corp, so that the Murdoch Family Trust held a controlling interest in them. He held four of the trust’s eight votes, while each of his adult children had only one. He could never be outvoted. But he had also stipulated that once he was gone, his votes would disappear and all the decision-making power would revert to the children. This meant that his death could set off a power struggle that would dwarf anything the family had seen while he was alive and very possibly reorder the political landscape across the English-speaking world.”
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    A very long, but very entertaining and informative read about the Murdoch family – its rise, its stumbles and its influence on the world today. Be warned, this is only the first part – but the entire thing is a great read.
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  4. “There has been a lot of churn in the Sensex over the decades. Corporate power in India seems to be more fragile than usually understood. Only a handful of companies such as Tata Motors, Hindustan Unilever, Mahindra & Mahindra, ITC, and Larsen & Toubro have managed to hold their place in the index. Many of the older industrial houses such as the Thapar group, the Walchand group and the Kirloskar group have slipped out of the benchmark index. Even the real estate and infrastructure giants who had a strong presence in the Sensex a decade ago — Jaiprakash Associates, Reliance Infrastructure and DLF, for example — are no longer in the index.”
    Niranjan Rajadhakshya writes in Livemint about the churn in the Sensex. Worth reading for the chart alone that appears midway through the article.
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  5. “The government has tried to change ideas about death through directives and incentives. In 2016, officials issued guidelines for encouraging more burials within nature, rather than delineating plots for tombs and memorials. In a revised law on funeral management in September, the central government called on local governments to provide financial support for public cemeteries, which would be cheaper for residents.”
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    An interesting read about the burial problem in China, and what they’re doing about it.
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Links for 18th April, 2019

  1. “According to the Wall Street Journal, Mickey Mouse and his gang (including Minnie, Goofy, Pluto, and Donald Duck) sold $3 billion in merchandise in 2018, a figure that includes both adult and children’s products. Shockingly, that is only about half of what Mickey made in 2004, when Disney heavily pushed out products in celebration of his 75th birthday.”
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    The Fast Company on the gift that (literally) keeps on giving for Disney. But you should also read Ben Thompson to understand that this is planned – way back when.
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  2. “American involvement in military and economic capacity building could facilitate or overlap with India’s interests in its neighbourhood – to some extent. Delhi has traditionally been skeptical, if not suspicious, of extra-regional actors’ activities and influence in its neighbourhood. Its resistance to such activity on the part of the U.S. has historically only been tempered when Delhi has had even greater concern about a Chinese presence. Now, with increasing Chinese activity in the region and limited Indian capacity to compete alone, Delhi once again seems more willing to work with – and perhaps begrudgingly accept or welcome greater interest from – partners like Japan and the U.S.”
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    A useful article to read to understand Indo-American relations today, and also how to think about these two countries and the Indo-Pacific region in light of the gorilla (or is it the panda) in the room.
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  3. “The world loves meat, but that love puts pressure on the world. The United Nations has estimated that livestock are responsible for 14.5 percent of the greenhouse gas emissions that are trapping heat in the atmosphere. Project Drawdown, a group of scientists pursuing climate solutions, puts the figure at 18 to 20 percent, and some studies have suggested even that’s way too low. In any case, meat is a significant contributor to the climate crisis, and as millions of families in India and China join the meat-eating middle class, its contributions could soar.”
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    An interesting article that helps you understand the players (politicians, firms and individuals) involved in the race to produce plant based meat.
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  4. “The report finds 54.4% of girls had access to menstrual hygienic management tools. However, in terms of wealth quintiles, we see massive variation. While 71.6% of the surveyed girls in the upper wealth quintile report access to MHM tools only 42.6% of girls in the lower wealth quintile report similar access. When inquired about reasons for not using MHM tools, about three-fifths of the surveyed girls reported that they couldn’t afford them and since the government does not provide them, they choose to stick to traditional methods.”
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    A useful, and interesting survey about the aspirations of teenaged girls in India.
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  5. “Readers today are unlikely to confuse an adolescent with an armload of brushwood used for fences and hedges. Still, the magazine’s copy editors dutifully hyphenate “teen-ager” even as we half-heartedly enforce the ban on “balding”—the editor William Shawn preferred “partly or partially bald”—without knowing exactly what is wrong with it.”
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    Grammar nerds and readers or this blog: rejoice.

Links for 17th April, 2019

  1. “Nearly half a million people are incarcerated on any given day without having been convicted of a crime. Add it all up, and over 10 million people during a given year year are locked up without being convicted of anything. Roughly one-quarter of all inmates in state and local jails have not been convicted. ”
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    Timothy Taylor explains the pros and cons of eliminating monetary bail. The issue is a complex one, as one might expect, and is a useful way to learn about cost benefit analysis.
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  2. “It’s a reminder that “growth” in cities isn’t always what it seems and that architecture can be an awfully poor proxy for the social structures to which it seems so closely tied. Neighborhoods that appear to be magnets for new people and more apartments may, behind every historic façade, be losing both.”
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    Opportunity costs, population density, gentrification, urbanization and reducing family size – all there in this information dense article.
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  3. “A lot of what you learn when you work at a firm is its organizational culture. Moving within a firm means you learn new subject matter, but you are largely staying within the same culture. The psychologically more challenging move to a different organization gives you an opportunity to experience a different culture, sort of like spending time abroad.”
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    Arnold Kling on culture and the organization. On a related note, the recent somewhat viral article about AirBnB and its culture is also worth reading.
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  4. “There’s a lot going on when you speak. The whole assembly process of how you string words together and form sentences is complicated. If you could use a computer to analyze how an Alzheimer’s patient speaks over the years, you might be able to pick up on subtle changes—and then look for those same patterns in younger patients who show no other signs of the disease. If you’re able to identify those changes early enough, you might even be able to stop someone from getting Alzheimer’s in the first place (although we’d also need advances in Alzheimer’s prevention to do that).”
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    Might how you talk be able to predict if you will get Alzheimer’s in the future? A complicated topic, and one that is sketchy on the details – but very interesting nonetheless.
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  5. “Chinese government statements indicate that 50 state-owned firms have invested or participated in almost 1,700 projects in countries along Belt and Road’s path over the past three years, according to Baker McKenzie. The wider the road, the more drivers are bound to crowd in.”
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    International finance meets the Belt and Road Initiative. Who will win, and in what shape, is what the article speaks about.

Links for 16th April, 2019

  1. ““Wow, they really train you over there,” our father said. In the weeks since her release, he had become a champion government booster, missing no opportunity to point out to Lulu how nicely the roads had been paved since she’d left, how grand the malls were that had been built. “There are so many opportunities for young people now,” he said. It was a new tic of his, and it grated. Earlier that day, as we strolled the neighborhood, he’d taken the chance to point out a set of recently upgraded public toilets across the way. “They even installed a little room where the sanitation workers can rest,” he said. “It has heating and everything. You see what good care they take of all the workers now?””
    A tale of what happens if you happen to against the authorities in our big neighbor to the east. Sobering reading.
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  2. “Friends and relatives in other parts of the developed world tell me that many of these services and speed are unique to India. While we were busy cribbing in India, a huge shift happened in the last 10-15 years in services—both public and private—that we’ve failed to notice. A mix of technology, cheap labour and super competitive firms have unleashed this service boom in the private sector. Technology, political will (across parties and governments) and the failure of the human government interface in public services has driven the public service boom. Just on the services metric, India will soon plunge ahead of most of the developed world. Take a moment and reflect on how far we’ve come in just a decade.”
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    Meanwhile, Monika Halan points out how much things have improved here, in India.
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  3. “And it reinforced a change in mind-set that already was bubbling up from Chinese urban planners—one that then got ratified in a startling way. In 2016 the Communist Party Central Committee and the State Council, the highest organs of the state, issued a decree: From now on Chinese cities were to preserve farmland and their own heritage; have smaller, unfenced blocks and narrower, pedestrian-friendly streets; develop around public transit; and so on. In 2017 the guidelines were translated into a manual for Chinese planners called Emerald Cities. Calthorpe Associates wrote most of it.”
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    There is much to excerpt from this article about how urbanization is changing, taking root and improving (mostly) the world over. A great bird’s eye view to urbanization in various parts of the world today.
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  4. “A brief description of Lambda School for the uninitiated: A live, fully online school that trains people to become software engineers, data scientists and designers which is free until you get a job. Instead, students pay a percentage of their income each year after they’re employed, the maximum of which is capped at $30k.”
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    Rahul Ramchandani explains what Lambda School is, in case you haven’t heard of it before. Also a good article to learn about Bloom’s 2 sigma problem.
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  5. “But remember: gravity was considered creepy occult pseudoscience by its early enemies. It subjected the earth and the heavens to the same law, which shocked 17th century sensibilities the same way trying to link consciousness and matter would today. It postulated that objects could act on each other through invisible forces at a distance, which was equally outside the contemporaneous Overton Window. Newton’s exceptional genius, his exceptional ability to think outside all relevant boxes, and his exceptionally egregious mistakes are all the same phenomenon (plus or minus a little mercury).”
    In praise of having bad ideas, and how one bad idea (or even a few of ’em), shouldn’t really define a person for you.

Links for 12th April, 2019

  1. “Due to these challenges, the Belt and Road has provoked growing international resistance, most acutely in the Indo-Pacific. This rising backlash has not gone unnoticed in Beijing.3 Yet it is unlikely that China’s approach will fundamentally change in the years ahead. The sheer size of ongoing Belt and Road projects limits China’s ability to refocus on smaller and less controversial efforts. Moreover, the Belt and Road is ultimately a vehicle for China’s geopolitical ambitions. Liabilities for host countries – loss of control, opacity, debt, dual-use potential, and corruption – are often strategic assets for Beijing. ”
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    Worth reading in its entirety, both for how well they have framed it (10 issues, 7 challenges) and for understanding the scope, the scale of OBOR – as well as why China wants something like this to happen.
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  2. “Krugman’s assertion that capacity keeps on rising might be correct – but that probably depends on one of the following conditions:The recession is short enough not to significantly affect innovation and investment
    Growth depends on factors that are not (negatively) affected by recessions
    Underlying capacity growth will accelerate beyond trend as the recession endsThe first we can yet hope for, but it’s looking less likely every month.”
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    This was written ten years ago. It is a great way to understand the following: business cycles, trend stationarity, unit root hypothesis, innovation, capacity building, endogenous growth theory. It is simply written, engaging, understandable – and because it was written ten years ago, can be validated. Worth it!
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  3. “Whereas Liverpool’s pursuit of the league title has been characterised by anxiety, drama and late winners, since the turn of the year City have been gracefully efficient at tearing into opponents, getting an early goal and so being able to control a game. Gabriel Jesus’s header against Brighton in the FA Cup semi-final on Saturday was the sixth goal City have scored this season inside five minutes, the 12th before the 10th minute and the 26th before the 20th. That is clearly part of a policy: rip into opponents, prevent them settling and have the game won before any doubts can begin to creep in. It may be that in a two-leg tie there’s less impetus to do that – but then an away goal can make a huge difference.”
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    You might find this choice weird, especially if you don’t like football, but this resonated with me as a way to do more than just play football. Think about it!
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  4. “Mumbai is the engine of the prosperous western state of Maharashtra, India’s largest regional economy with a GDP somewhere between $350-400 billion; the city contributes well over half the total. For Maharashtra to become a $1 trillion economy, Mumbai would need to double or triple the size of its economy, on the back of its preeminent role in service industries, especially finance. That means competing with the likes of Singapore and Shanghai to attract global banks and other world-class financial institutions to the humid, traffic-choked city.”
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    Rueben Abraham and Shashi Verma in Bloomberg on how the port near Mumbai has the potential to change Mumbai into a truly global financial hub. The cynic in me wonders if it will be possible, but the nascent urbanization enthusiast hopes that this, at least, gets off the ground!
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  5. “Amsterdam transit commissioner Sharon Dijksma announced Thursday that starting this summer, the city plans to reduce the number of people permitted to park in the city core by around 1,500 per year. These people already require a permit to access a specific space (and the cost for that permit will also rise), and so by reducing these permits steadily in number, the city will also remove up to 11,200 parking spaces from its streets by the end of 2025.”
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    Speaking of urbanization done just right, here’s Amsterdam with a plan to reduce parking spaces in the city centre – and beyond.

Links for 27th March, 2019

  1. “As a program adapts and serves more people and more functions, it naturally requires tighter regulation. Software systems govern how we interact as groups, and that makes them unavoidably bureaucratic in nature. There will always be those who want to maintain the system and those who want to push the system’s boundaries. Conservatives and liberals emerge.”
    Here’s a useful thumb-rule. Read anything written by Atul Gawande. In this article, he speaks, nominally, about the difficulty of adapting to a new computer system that is being foisted upon the medical community. But there’s much more to unpack here! Adapting to systems, mutations within systems, the difficulty of scaling, substitutes and complements, opportunity costs – and much, much more.
  2. “Pig facial recognition works the same way as human facial recognition, the companies say. Scanners and software take in the bristles, the snout, the eyes and ears. The features are mapped. Pigs don’t all look alike when you know what to look for, they said.”
    The intersection of technology, pork and the culture that is China today. Some might call this dystopian, others might fret at how slow progress is – but the article is fascinating.
  3. “The level of u* is not fixed. It changes over time, driven by changes in labor laws, the minimum wage, government benefit programs, demographics and technology. For instance, u* might decline if workers, on average, are older; older workers are less likely to be unemployed. The level of u* might rise if unemployment benefits become more generous and this leads unemployed workers to be more picky about taking jobs.”
    NAIRU – or the Non-Accelerating Inflation Rate of Unemployment, was one of the more nerdy acronyms I learnt when I was a student. This article does a good job of explaining exactly what this is, and why it matters. And most importantly, it does so in a way that isn’t confusing for the layperson.
  4. “These calculations make clear why economists so often argue against light rail and subway construction projects. They are so expensive that ridership can only begin to cover construction and maintenance costs if the systems operate at close to their physical capacity most of the time; that is, if there are enough riders to fill up the cars when they run on two- to three-minute headways for many hours per day. Since most proposed projects do not meet this standard, economists generally argue against them. Buses can usually move the projected numbers of riders at a fraction of the cost.”
    I am, and probably always will be, a huge fan of buses over other forms of public transport. And I will always be a big fan of public transport over private transport. This article explains why not just I, but other economists will also tend to favor buses over other forms of public transport.
  5. “The principle that you are presumed to be innocent unless and until you are convicted, after a fair trial, turns out, in practice, to be a different principle altogether: for the purposes of compensation, once you are convicted your conviction is deemed to be correct. You are presumed guilty for the rest of your life, irrespective of whether your trial was fair or unfair. It makes no difference that your conviction has been quashed. It makes no difference that new evidence – which ought to have been obtained by the police before your trial – shows that you are probably innocent. Those acting on behalf of the state may have bungled the investigation, and possibly even bent the rules to get you convicted. None of that is of any consequence. All that matters is whether you can prove that you suffered a “miscarriage of justice:” ”
    I teach statistics, and would happily spend an entire semester explaining how to frame the null, and more importantly, hot to not frame the null. This article does an excellent job of providing an all too important example of the latter.

Links for 19th March, 2019

  1. “Why do two people need a scrap of paper except to reassure them there’s concrete proof of their relationship?”
    … is a question worth asking in many respects, not just relationships. But some articles don’t really need to be subjected to analysis. A truly beautiful read, by Priya Ramani.
  2. “The episode is symptomatic of a fundamental European problem: unlike in China, macroeconomic policy, industrial policy and foreign and security policy are run independently of each other. The Huawei 5G bid shows that the EU is not well prepared to deal with a connection between security and industrial policy. Nor have the Europeans paid much attention to the impact of their fiscal rules — not least on defence and security policies. China, by contrast, has an integrated approach to economic and foreign policy.”
    Wolfgang Manchau on China and Germany, and who will have the upper hand going forward. Also an interesting way to think about what works better – top down approaches, or decentralized decision making. I usually find myself in favor of decentralization, but this article made me think about that a bit.
  3. “Second, growth in India has been unequalising because the top 10 per cent have benefitted disproportionally more from it than the bottom 90. In addition, growth has been unequalising across regions and ethnicities. In these circumstances, arguments for direct transfers are in vogue to compensate for this failure, not to address it.”
    Rathin Roy in an excellent article explains why we spend far too little on far too many things (and when I say we, I mean the government). Two things: this, theory suggests, is inevitable. Two, the column doesn’t mention – probably because of lack of space – the political compulsions that make this all but inevitable. But it is a great read!
  4. “Economists and commentators who have written on UBI for India have made the case for doing away with many subsidies and exemptions. The problem is that doing so may not be politically feasible. How does any politician sell the taking away of food subsidies to the masses of the country? Or how does any politician justify the introduction of tax on agricultural income or the introduction of estate duty or doing away of subsidies on urea and other fertilizers?”
    And while on that topic, Vivek Kaul in ThinkPragati reviews a book about Universal Basic Income by Guy Standing. I have not read the book, but the quote above jumped out at me. In my opinion, the problem with implementing UBI in India is not an economic one, but a political one.
  5. “Olive trees follow a pattern known as alternate bearing, with bad years routinely followed by good. This year, the EU expects Europe’s overall olive basket to be saved by a surge from its biggest producer, Spain.A trend there towards super intensive plantations may partly mitigate climate change impacts, according to Valentini – but at a cost to traditional farming and biodiversity. Fast-growing, high-density olive plantations might be more drought-resistant but water resources could also be limited by these plantations, he said”
    Will future generations understand the phrase “like taking coals to Newcastle”? Italy – and I cannot believe I am typing this out – will import olives this year. Whatever will the next Mario Puzo do?