Can Undergraduates Be Taught To Think Like Economists?

The title of today’s blogpost has been copied, word for word, from a blogpost I had linked to earlier (the fifth link in this post).

It’s been about two and a half years since I read that post. I would still like to believe that Deirdre McCloskey was wrong, and that you can too teach undergraduates to think like economists. But well, perhaps the truth lies somewhere in the middle.


A common goal for principles of economics courses is to teach students to “think like economists.” I’ve always been a little skeptical of that high-sounding goal. It seems like a lot to accomplish in a semester or two.

https://conversableeconomist.blogspot.com/2019/03/can-undergraduates-be-taught-to-think.html

Both Tim Taylor and Deirdre McCloskey (whose essay I excerpt from below) aren’t saying that you can’t teach economics to undergraduates. You most certainly can, and you don’t need to run a fancy-pants model to ascertain this. What they are saying, however, is that it is one thing to teach them the principles of economics. It is quite another to teach them to apply these principles in their lives, at all times.

Bower thinks that we can teach economics to undergraduates. I disagree. I have concluded reluctantly, after ruminating on it for a long me, that we can’t. We can teach about economics, which is a good thing. The undergraduate program in English literature teaches about literature, not how to do it. No one complains, or should. The undergraduate program in art history teaches about painting, not how to do it. I claim the case of economics is similar. Majoring in economics can teach about economics, but not how to do it…. (Emphasis added)

http://www.deirdremccloskey.com/docs/graham/natural.pdf

It is one thing to teach opportunity costs. And most students we’ve taught will tell you the definition. The “good” students will tell you three different definitions, from three different textbooks, and maybe cite a couple of academic papers that ruminate about what the definition means. Well, great. Do these students apply the concept of opportunity costs in their daily lives? Do they ask themselves if this (whatever this may be) is the best use of their time, and what are they giving up in order to do this?

Does winning matter more than learning? Does winning matter more than doing? If you end up defeating somebody else – a person, a team, a tribe, a party or a nation – what do you gain? And to go back to the previous paragraph, was it but a Pyrrhic victory?


Consider this hypothetical:

Let’s say there’s two teams in some corporate environment somewhere. And for whatever reason, these teams don’t get along well together. Both sides believe that they’re in the right, and the other side is in the wrong, and we’ve reached Mark Twain territory.

Are they going to go to their manager(s) and ask them to resolve this issue? Sure, it may seem like a good idea initially. But said managers, I can assure you, have things to do. Deliverables to, well, deliver. Teams to manage. Projects to initiate. Other people to manage. And so the manager(s) might listen to both teams long list of complaints once, perhaps twice.

But eventually the price mechanism will come to the party. The more the two teams spend time on this, rather than on work, the more expensive the situation becomes for the enterprise. Because a commodity that is limited (time) is being spent on non-productive work (productive, in this case, can be thought of as remunerative).

Since the whole point of the firm’s existence is to maximize revenue, this will not be tolerated for too long. The manager(s) will eventually say one of the following:

  1. Figure it out yourselves, but get the work done, for that’s what matters. Or else.
  2. Let’s reallocate, forcibly, both teams on to other projects. This will usually be accompanied with a mental note to themselves that truly important projects in the future should not be given to these team members. For obvious reasons.
  3. Or let’s shut down the project, because the point of a firm is to do the work that earns one the money. Start something new, with a new set of people.
  4. Now, since the team members are old enough to know that eventually pts 1 to 3 will occur, they usually swallow their differences and get the work done. Sure, bitching about the other team will happen in bars and pubs in the evening, and sure the other team won’t be called home for dinner anytime soon. But in the workplace, professionalism will win out, due to the price mechanism. In more explicit terms, they will get the work done because they know that otherwise they will be fired.

The reason all of this will happen is because these team members will have families, responsibilities, loans to pay off. The money they will lose out on by losing their jobs is far too important, and the threat of losing out on their income forces them to behave professionally.

The opportunity cost argument comes into play. Playing politics may be good for your ego, but it ain’t good for your wallet. But that lesson comes with age, it doesn’t come from attending principles of economics classes.

A nineteen-year old has intimations of immortality, comes directly from a socialized economy (called a family), and has no feel on his pulse for those tragedies of adult life that economists call scarcity and choice. You can teach a nineteen-year old all the math he can grasp, all the history he can read, all the Latin he can stand. But you cannot teach him a philosophical subject. For that he has to be, say twenty-five, or better, forty-five. …

http://www.deirdremccloskey.com/docs/graham/natural.pdf

Adults don’t necessarily grasp the argument that the opportunity cost of politics is work. But they understand the rules of the game called life. They do understand that the opportunity cost of politics is an increase in the probability of losing their wages. And so they still practice politics, but more covertly. Not, in other words, an ideal situation if the system is trying to optimize work, but hey, better than overt politics.

How to get students to understand that the opportunity cost of politics is learning? That the opportunity cost of politics is not getting fun projects done? That the opportunity cost of resolving arguments, or adjudicating who said what to whom and when is not being able to start other fun learning based projects? There’s no price mechanism at play, there’s illusions of immortality (they don’t get that time is limited), they don’t have the responsibility of putting food on the table (they come from a socialized economy called a family), and they haven’t experienced the tragedies of adult life.

To them, winning a political argument against the other side is the best use of their time.


Principles of economics, if taught well, and if learnt well, should in theory help you understand that the opportunity cost of politics is work. Philosophy should in theory teach you that good work is better than bad politics.

I’ll say this much: I was convinced that Deirdre McCloskey was wrong when she said that you couldn’t have undergraduates do economics, even if we taught them economics.

Now?

I hope.

The Positive Externalities of Writing a Blog Post

If I ever meet Zeynep Tufekci, a beverage of her choice is due to her from me.

Last week’s post about her take on metaepistomology bought forth two very pleasant consequences. Whether they were intended or not is a question I myself have been grappling with, but I shall deal with that question (and that story) later on this week.

About those consequences:

  1. A student from the BSc program at the Gokhale Institute wrote in asking if we could have a discussion about metaepistomology – and you’ll permit me a self-congratulatory pat on the back for getting folks interested in a word as daunting as that. This of course means that I will have to spend a fair chunk of my time today reading up about metaepistomology myself, but I know that can only be a good thing.

    (Or do I?)
  2. Another student from the same program asked why a course on philosophy wasn’t a part of the program in a formal sense. To which I had no good answer, beyond saying that the course constraints were such that it could not be fit in.

Which, let’s be upfront and honest, is no answer at all. So, the topic of today’s blogpost: if there were to be a summer school, or a workshop, or a weekend course – whatever – on philosophy at the undergrad level, what all should it contain?

I don’t have a formal training in philosophy, having never taken the subject in my own undergrad days. It wasn’t on offer, I am sad to report, when I was doing my Masters. But I have tried to read a little bit here, and a little bit there, and have jotted down the list below as a starting point. Note that I have tried to ask what should be included in a summer school for students of economics who are studying philosophy for the first time, rather than first time students of philosophy. Also not that I am a complete amateur: please, point out obvious omissions!

That, I’m guessing should be more than enough for a 30 hour introduction, and the reading list is already monstrous.

So when I ask of you, what am I missing, I’m really asking the following: who/what would you include (and why) and who/what would you remove (and why). If there is anybody reading this who could help, please do write in.

Thank you!

Understanding Google

Out of all the tech companies that I have written about so far, Google is far and away my favorite, and one that I always have wanted to work at (at some margin, I still do).

It’s just – and this is a personal thing, may not work for everybody – cool.

The only reason I say this at the outset is to make sure that you’re aware of my biases!

Here we go:


I often ask this question in classes I teach in microeconomics, or introductory economics:

“What is Google’s business?”

The default answer is almost always “search”. At which point of time, I have a follow-up question: identify for me one person who has paid Google to run a search.

In fact, if anything, Google seems to go out of its way to keep Google search free. And if running a search is not to be paid for, it can’t be much of a business, right?

So what is Google’s business?


But suppose we say that Google is primarily an advertising company. That changes things. The U.S. search engine advertising market is $17 billion annually. Online advertising is $37 billion annually. The entire US advertising market is $150 billion. And global advertising is a $495 billion market. So even if Google completely monopolized US search engine advertising, it would just own 3.4% of the global advertising market. From this angle, Google looks like a small player in a competitive world.

What if we frame Google as a multifaceted technology company instead? This seems reasonable enough; in addition to its search engine, Google makes dozens of other software products, not to mention robotic cars, Android phones, and wearable computers. But 95% of Google’s revenue comes from search advertising; its other products generated just $2.35 billion in 2012, and its consumer tech products are a mere fraction of that.

That’s Peter Thiel, in From Zero to One. The context in which he wrote this apart, what matters is the fact that he’s absolutely right about the fact that Google earns a vast amount of its revenue from advertising, not running searches.

But what are advertisers paying money to Google for? To provide digital real estate, in which ads can be shown, and the impact of these ads can be measured better than ever before in history. And advertisers are willing to pay because Google understands its users better than anybody else. Why does Google understand its users better than anybody else?

Because we have some combination of the following as part and parcel of our daily lives

Google Maps | YouTube | GMail | Android | Chrome OS | Chrome Browser |

But here’s the thing: we don’t pay for any of these. By that logic, we aren’t Google’s customers. But advertisers are Google’s customers and that makes us Google’s… products.

 


 

So here is the kicker. Android, as well as Chrome and Chrome OS for that matter, are not “products” in the classic business sense. They have no plan to become their own “economic castles.” Rather they are very expensive and very aggressive “moats,” funded by the height and magnitude of Google’s castle. Google’s aim is defensive not offensive. They are not trying to make a profit on Android or Chrome. They want to take any layer that lives between themselves and the consumer and make it free (or even less than free). Because these layers are basically software products with no variable costs, this is a very viable defensive strategy. In essence, they are not just building a moat; Google is also scorching the earth for 250 miles around the outside of the castle to ensure no one can approach it. And best I can tell, they are doing a damn good job of it.

That was Bill Gurley, in 2011, on his own blog.

All those products that I listed above? They weren’t build to generate revenue for Google (although that may be changing now), they were built to make sure that Google continued to attract, and track, eyeballs.

That allowed Google to continue to sell advertisements, which is where it makes the bulk of its money from. And they’ve refined the signal-to-ads cycle, as Ben Thompson calls it, better than anybody else:

Google dominates every aspect of this cycle, and every announcement at IO accrued to it:

On the signal side:

  • Their mobile apps are both the best, and the most popular, and they work best with a Google+ account
  • Their browser is the best, and the most popular, and it works best with a Google+ account
  • Their maps are the best, and the most popular, and they work best with a Google+ account
  • Their video website (YouTube) is the best, and the most popular, and it works best with a Google+ account
  • Their mail service (GMail) is the best, and the most popular, and is a Google+ account

And they simply own online advertising, with the best, and most popular, search ads, 3rd-party ads, and display ads.

But for the longest time, Google was a hammer in search of a nail.

 


 

Google was by far and away the best search engine in the late 1990’s – it wasn’t even close. But – and it was a big, painful “but” – how to make money? Enter economics, Google style:

Googlenomics actually comes in two flavors: macro and micro. The macroeconomic side involves some of the company’s seemingly altruistic behavior, which often baffles observers. Why does Google give away products like its browser, its apps, and the Android operating system for mobile phones? Anything that increases Internet use ultimately enriches Google, Varian says. And since using the Web without using Google is like dining at In-N-Out without ordering a hamburger, more eyeballs on the Web lead inexorably to more ad sales for Google.

The microeconomics of Google is more complicated. Selling ads doesn’t generate only profits; it also generates torrents of data about users’ tastes and habits, data that Google then sifts and processes in order to predict future consumer behavior, find ways to improve its products, and sell more ads. This is the heart and soul of Googlenomics. It’s a system of constant self-analysis: a data-fueled feedback loop that defines not only Google’s future but the future of anyone who does business online.


And so Google has become a company that has changed how to think about business in tech: give away cool products for (nearly) free, in exchange for your information, that is then sold on to advertisers.

A useful way to think about Google is that you are Google’s product, not its customer. Think of it this way: if you aren’t paying for something, how can you possibly be a customer?

Facebook and Google both have the same model: ad-driven.

There are many, many things to unpack as a consequence of thinking about this business model, and we’ll get to all of these things in the weeks to come.

EC101: Links for 26th December, 2019

  1. On some articles about Baumol’s cost disease.
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  2. A topic that is very, very dear to my heart: teaching economics better, and to younger folks.
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  3. A topic on which I changed my mind this year, and therefore this year ought to count as a success. Props to Murali Neelakantan for helping me do so! On patents.
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  4. Two sets of links about this year’s Nobel. One set is rather informative
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  5. While the other is more critical.

EC101: Links for 18th July, 2019

Some news: the Gokhale Institute of Politics and Economics (where I work) recently started an undergraduate program in economics. I can’t tell you how excited I am at the opportunity to teach young people economics. Hopefully – although I cannot commit to this yet – I will be able to keep you updated with what we’re trying that’s different, and what I learn through the process of teaching in this program.

In honor of this first batch of students, though, here are five links from two people who have inspired me, and countless others, to both learn and teach economics. Marginal Revolution: thank you.

  1. What should I read to learn economics?
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  2. What’s the shortest description of economics as a field of study?
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  3. How soon is too soon to start teaching economics?
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  4. Can skating teach you about economics? Well, uh, it’s complicated
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  5. The most important lesson in economics I have ever learnt, and can ever teach.

 

As I said, I hope to update this blog regularly with lessons I have learnt, of many sorts. And fingers crossed, I will be able to do so. Here is the syllabus, in case you are interested.  In the meantime, if you have suggestions, comments, feedback – please do let me know.

Thanks.

Links for 27th May, 2019

  1. ” In today’s world, we’re typically writing contracts in natural language, or actually in something a little more precise: legalese. But what if we could write our contracts in computational language? Then they could always be as precise as we want them to be. But there’s something else: they can be executed automatically, and autonomously. Oh, as well as being verifiable, and simulatable, and so on.”
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    Stephen Wolfram on computational languages, and what it might mean for all of us in the future. Can’t say I understood all of it right off the bat, to be honest – which is why I’ll be reading it again sometime later.
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  2. “I was interested in the notion that you could take a busy place — an airport and a marketplace, you can call it kind of a mall, with hundreds of shops and all that comes with it — and cohabit it with a magical park, which is nature at its best, which is relaxing and serene, and is the escape from all of that busyness.Airports are not exactly relaxed places, and I thought, what would be better than to create a place of total serenity?

    We’ve planted thousands of trees and all kinds of other vegetation. And now, six months since we planted it all, it’s already a lush jungle.

    You walk through the trails, and you forget you’re in a city, and you forget you’re in an airport, and you forget you’re in a building. You’re just out there in nature and, in that sense, it’s completely magical.”
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    Singapore’s Changi airport now has a seven storey waterfall apparently. Of course it does.
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  3. “Econtwitter is wonderful. Yesterday, an undergraduate emailed me to ask for book recommendations about the overlap between economics and philosophy. I recommended:Amartya Sen The Idea of Justice
    Michael Sandel What Money Can’t Buy: The Moral Limits of Markets
    Agnar Sandmo Economics Evolving
    and
    D M Hausman and M S McPherson and D Satz Economic analysis, moral philosophy, and public policy
    Then I asked Twitter, and here is the resulting, much longer, list. I won’t editorialise about them, although some are not good undergraduate intros in my view. One striking thing is how few recent overviews there are, however (as @esamjones also pointed out on Twitter). Huge thanks to all who made suggestions. This is a fantastic collective list.”
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    Whatever bookmarking method you use, add this to that resource. And as she mentions, #econtwitter, really is wonderful. Diane Coyle with a very important, very useful list. Undergrad resources for the intersection of economics and philosophy.
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  4. “If you missed the Chinese mission, maybe it’s because you were focussed on the remarkably inexpensive spacecraft from SpaceIL, an Israeli nonprofit organization, which crash-landed into the moon on April 11th, soon after taking a selfie while hovering above the lunar surface. The crash was not the original plan, and SpaceIL has already announced its intention of going to the moon again. But maybe you weren’t paying attention to SpaceIL, either, because you were anticipating India’s Chandrayaan-2 moon lander, expected to take off later this year. Or you were waiting for Japan’s first lunar-lander-and-rover mission, scheduled to take place next year. Perhaps you’ve been distracted by the announcement, in January, on the night of the super blood wolf moon, that the European Space Agency plans to mine lunar ice by 2025. Or by Vice-President Mike Pence’s statement, in March, that the United States intends “to return American astronauts to the moon within the next five years.””
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    The New Yorker explains how the moon is becoming a rather crowded place, and is likely to only get even more crowded in the years to come – and also explains why.
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  5. “Santacreu and Peake compared research and development (R&D) efforts of the U.S. and China for the period 1999-2015. As of the most recent year, China’s R&D intensity, measured by R&D spending as a percentage of GDP, was 2.1% of GDP versus 2.8% for the U.S.However, China’s R&D intensity grew from less than 1% over the period studied, therefore increasing considerably faster than that of the U.S. “Because R&D intensity is a proxy for technological advancement, these data suggest that China is catching up to the U.S. in technology,” the authors wrote.”
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    Ask yourself this: in about thirty years from now, are you more likely to see the world’s innovation hub be in China or America? This article points to the likely answer.

Links for 17th May, 2019

  1. “Despite the 73rd and 74th Constitutional amendments, except in a few states, there has been little progress at decentralization—to both rural and urban local bodies. Most state governments have been reluctant to devolve the functions, funds and functionaries for delivering public services at the local level. The functions assigned are unclear, funds uncertain and inadequate, and decision-making functionaries are mostly drawn from the state bureaucracy. Local bodies do not even have powers to determine the base and rate structure of the taxes assigned to them. The states have not cared to create institutions and systems mandated in the Constitution, including the appointment of the State Finance Commissions, and even when they are appointed, states have not found it obligatory to place their reports in the legislature. In fact, the local bodies are not clear about delivering local public goods, with the prominent agenda of implementing central schemes obscuring their functions.”
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    M. Govinda Rao pulls no punches in pointing out how and why decentralization hasn’t (and likely will not) taken place in India. This is a conversation more people need to be having in India – and in particular, to aid meaningful urbanization.
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  2. “I love this paper because it is ruthless. The authors know exactly what they are doing, and they are clearly enjoying every second of it. They explain that given what we now know about polygenicity, the highest-effect-size depression genes require samples of about 34,000 people to detect, and so any study with fewer than 34,000 people that says anything about specific genes is almost definitely a false positive; they go on to show that the median sample size for previous studies in this area was 345.”
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    Slate Star Codex helps us understand the importance of learning (and applying!) statistics. The website is more than worth following, by the way.
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  3. “Sucking the life out of a mango is one of those primal pleasures that makes life feel worthwhile. The process is both elaborate and rewarding. The foreplay that loosens up the pulp inside, the careful incision at the top that allows access without a juice overrun, and then the sustained act of sucking every bit juice from the helpless peel. Senses detach themselves from the body and attach themselves to the mango, and even mobile phones stop ringing. The world momentarily rests in our mouths as we slurp, suck and slaver at the rapidly disappearing pulp. The mango is manhandled vigorously till only the gutli remains which is scraped off till it has nothing left to confess. As is evident, there is no elegant way to eat this kind of mango, no delicate and dignified method that approximates any form of refinement, which is just as well, for the only way to enjoy a mango is messily.”
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    An excellent column about an excellent fruit – there isn’t that much more to say! I completely agree with the bit about serving aamras front and center, rather than as an afterthought, by the way.
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  4. “Welcome to the 4th Annual Top Economics Blogs list. For the 2019 edition, we’ve added many newcomers, as well as favorites which continue to provide quality insight year after year. Like lists in previous years (2018, 2017, 2016), the new 2019 list features a broad range of quality blogs in practically every economic discipline. Whether you are interested in general economics or prefer more specific topics such as finance, healthcare economics, or environmental economics; there is something here for you. You will also find blogs which focus on microeconomics, macroeconomics, and the economics of specific geographical regions.Whether you are a student, economics professional, or just someone with a general interest in how economic issues affect the world around you, you’re certain to find the perfect blog for your specific needs.”
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    The most comprehensive answer to that most perennial of questions: what should I read?
    Bonus! If you’re wondering how to keep up with all of this, this might help.
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  5. “India should do the same with our state capitals. The Union government can create fiscal and other incentives to encourage state governments to shift their capitals to brown- or green-field locations. Mumbai, Bengaluru, Hyderabad, Chennai, Jaipur or Lucknow, for instance, will continue to thrive even if the state government offices move out. Their respective states will benefit from a new urban engine powered by government.”
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    I have been sceptical about the feasibility of doing something like this – my reading of urbanization has always been that it more of an organic process – cities grow (or not) of their own accord, and rarely as a planned endeavor. But maybe I’m wrong?

Links for 3rd May, 2019

  1. “So in the end what we get for policy to decide is whether the Indian aviation business should comprise large, medium or small oligopolies. If resolved sensibly it yields a solution to the problem of cross-subsidisation: the larger the number of firms, the greater will be the need for intra-firm cross-subsidisation as firms focus on a variant of the Ramsey Rule which says that network firms must maximise revenue instead of profits.This is best achieved via a public monopoly which far from reducing output, raising prices and making excessive profits as monopolies are expected to, can do the opposite just as Air India and Indian Railways do. In short, if we want to avoid a return to public sector transport monopolies, we must decide on the size of the oligopolies in the sector.”
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    A very short article, but an immensely interesting one, talking about airlines, India, monopoly, oligopolies, and regulation and policy in India.
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  2. “All that said, zero is still the best price. I think it’s appropriate for foundations or other funding sources to support a multiplicity of free textbook options. (I’m not looking at you, Bill Gates.) INET has done this with its CORE project, but no one else. I don’t think funding is the whole story, however. Economics needs to regard pedagogy as one of its central missions. This is not only a matter of having more panels about it at the national meetings; there needs to be more disciplinary reward for putting one’s time and energy into the development of strategies and materials for the classroom. This means promotion, prizes and esteem, and it would require a substantial cultural shift. Where to begin? I suspect we have a vicious circle that could well become virtuous. Today we have a bleak landscape of minimal innovation in pedagogy and little institutional recognition for those who do this work. In a world well-populated with innovative experiments in teaching and learning, it would be natural to reward the most successful or even just provocative projects. So again the next step seems to belong to the funders.”
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    A fairly interesting take on textbooks (econ textbooks, to be clear), what they cover, what they should cover, and what the price should be. Meta, but out of necessity.
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  3. “We find that the probability of seeing an outcome within 180 days from the date of admission is less than 5%. However, it picks up once the 180 day deadline is passed. Within 270 days, the chances of case closure are between 10 to 30% depending on the bench and case characteristics (e.g., creditor type). We observe high closure rate just past the 270 day period. Within 360 days of admission, the probability of seeing an outcome is significantly higher (30 to 70%). Quicker outcomes (liquidation or resolution) are observed for resolution proceedings triggered by the debtors themselves. Similarly, proceedings triggered before some benches result in resolutions speedier than those before some others.”
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    On the impact of the IBC on dealing with bankruptcies in India. Visit the link to find a link to a fairly good data-set pertaining to the issue being discussed.
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  4. “So buying shares of an IPO could be rational or irrational depending on your time horizon…and how lucky you are with what happens on the first day of trading.”
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    An interesting analysis on IPO’s and why they tend to be oversubscribed. Fairly well known, I’d say, if you’re a student of finance – but interesting nonetheless.
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  5. “The estimated cost of NYAY is substantial – Rs. 3.6 trillion a year. It would be broadly six times what has been allocated to MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) in the interim budget presented in February 2019. It is also nearly 13% of total central government expenditure for the fiscal year 2020. It is hard to see how such a large incremental spending programme can be funded through cuts in other expenditure items alone, including non-merit subsidies. That will be a very difficult political economy call, given that non-merit subsidies mostly benefit vocal interest groups. There thus has to be either fiscal expansion or an increase in tax collections. The latter could – but need not – entail higher tax rates. India could be at an inflection point at which its tax-GDP (gross domestic product) ratio begins to grow rapidly, but that is a guess rather than a hard fact. In short, there is ample reason to worry about the fiscal burden of NYAY. ”
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    Niranjan Rajadhakshya on the economic feasibility of NYAY. Students of public finance especially should read this to get a sense of how to judge questions such as the ones put forth in the interview.

Links for 30th April, 2019

  1. “On average that means each MP represented 1.85 million people. Now it is 2.4 million. There can’t be anything more absurd in the world.”
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    A very short takeaway from a very interesting article, about an issue that not too many people have thought about – remapping India’s parliament. This is going to be rather complicated.
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  2. “Bayes classifiers seem natural, and in many applications they are. But an interesting insight is that some classification problems may have hugely different costs of type I and II errors, in which case an NP classification approach may be entirely natural, not clumsy. (Consider, for example, deciding whether to convict someone of a crime that carries the death penalty. Many people would view the cost of a false declaration of “guilty” as much greater than the cost of a false “innocent”.) ”
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    Stats nerds only – but if you are one, a fairly interesting set of papers awaits you at the bottom of this link.
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  3. “At the end of the book, Fukuyama, when discussing the contemporary China, writes that “good enough” rule of law is often sufficient for fast economic growth. Moreover, technology is much more important than property rights. Fukuyama points out that in a Malthusian world, no property rights will provide you with an economic surplus; but technological development will (p. 249).”
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    Reading this article should hopefully encourage you to read a little bit more about Hayek, Mancur Olson (which I myself have just started to do, courtesy prodding from a friend), and Fukuyama himself.
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  4. “There is one key idea of the book. If you wish to have a functional political order that enables economic growth and gives people freedom from arbitrariness of the sovereign or from oppression by their peers, you need three components: (i) a strong state, (ii) rule of law, and (iii) accountability.”
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    Do not diss either the excerpt, or the post, or the book it reviews. The link is in fact the first one from the article linked to in 3 above – but the post is important enough to merit a separate link.
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  5. “Thus, I agree with McCloskey that truly “thinking like an economist” is a very rare outcome in a principles course, and unless you are comfortable as a teacher with setting a goal that involves near-universal failure, it’s not a useful goal for instructors. But it also seems true to me that the series of topics in a conventional principles of economics course, and how they build on each other, does for many students combine to form a comprehensible narrative by the end of the class. The students are not thinking like economists. But they have some respect and understanding for how economist think.”
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    Gokhale Institute this August embarks upon an attempt to disprove this lovely article. Wish us luck.