Links for 14th February, 2019

  1. “The best guess is that the next downturn will similarly involve a mix of troubles, rather than one big thing. And over the past few months we’ve started to see how it could happen. It’s by no means certain that a recession is looming, but some of our fears are beginning to come true.”
    Looking into the future is pointless, but this blog post is a useful summary of the answer to the question “If a recession were to arrive, what might be the likely causes?”. Paul Krugman lays out the usual suspects: China, America, Europe, and the trade war.
  2. “The purchasing managers’ index for the single currency area — watched closely by European Central Bank policymakers as an early indication of what will happen to GDP — hit 50.7, down from 51.1 in December, according to a flash reading from data firm IHS Markit.The reading was the lowest for 66 months — though it remains above the crucial 50 mark which suggests activity is still expanding and the region is not yet in recession.”
    It’s not bad, but it’s not looking good for Europe is the best way to read this. By the way, if you aren’t already familiar with the PMI, you may want to start keeping a tab on it for various countries. The first link today contains this link, but I found it important enough to mention separately.
  3. “…it’s important to remember that these days the social media tail wags the mainstream media dog. If you want your story to be well placed and if you want to be professionally rewarded, you have to generate page views — you have to incite social media. The way to do that is to reinforce the prejudices of your readers.”
    This is much easier said than done, and I don’t claim to be good at it at all – but I think it is important to train yourself to not have an opinion be formed, or reinforced, by reading anything in the newsA classic example of how things can go awry.
  4. “Most reports now don’t even mention the tweet as an instrumental element in obtaining and confirming the news. And that’s the fundamentally new and interesting thing to me: Twitter has blended in with all of the other infrastructure of the web that we take for granted. It’s the Google search, Google Reader (RIP), and sometimes Wikipedia for journalists and other news addicts. We use tweets as jumping-off points just as we use URLs, following them as conduits en route to the story.”
    Given a choice, I’d consume most of my information (what you might call news) from RSS even today – Google Reader is something I miss dearly. But the role of Twitter is underrated as a place to acquire consistently interesting information. Culling people you no longer want to listen to is much easier on Twitter than anywhere else – and that, to me, is Twitter’s biggest strength.
  5. “Hummingbird behavior is also of interest because they have been shown to be excellent learners. Dr. Clark said there is speculation that because they live on the edge in terms of their energy budget, they may require a great memory for where the food sources are.”
    Being forced to be good at something because of constraints imposed on you ( by others and yourself) is something that could be quite useful for all of us.  There’s other interesting snippets of information throughout this article.
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Links for 11th February, 2019

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

Paul Krugman on a Roller Coaster

This made my day. Via MR: