EC101: Links for 28th November, 2019

  1. “The zeroth step, of course, is being open to the process of unlearning. We come with our own biases, shaped by our varied experiences and perceptions. But our experience or knowledge is not always indicative of the macroreality. An unrelenting hold on what we have already learnt is the equivalent of the sunk cost fallacy in economics.”
    ..
    ..
    Pranay Kotasthane has a new newsletter out, and it is worth subscribing to. Stay humble and curious is the gist of his zeroth lesson, and the other points are equally important. Go read, and in my opinion, subscribe.
    ..
    ..
  2. “China is still a one-party state, but it owes much of its current prosperity to an increase in liberty. Since Mao died, his former subjects have won greater freedom to grow the crops they choose, to set up businesses and keep the profits, to own property, and to move around the country. The freedom to move, though far from absolute, has been transformational. Under Mao, peasants were banned from leaving their home area and, if they somehow made it to a city, they were barred from buying food, notes Bradley Gardner in “China’s Great Migration”. Now, there are more rural migrants in China than there are cross-border migrants in the world.”
    ..
    ..
    The rest of this article from the Economist is about migration to the cities – and I find myself in complete agreement – many, many more people in India need to live in her cities. But also see this!
    ..
    ..
  3. “Mazzucato traced the provenance of every technology that made the iPhone. The HTTP protocol, of course, had been developed by British scientist Tim Berners-Lee and implemented on the computers at CERN, in Geneva. The internet began as a network of computers called Arpanet, funded by the US Department of Defense (DoD) in the 60s to solve the problem of satellite communication. The DoD was also behind the development of GPS during the 70s, initially to determine the location of military equipment. The hard disk drive, microprocessors, memory chips and LCD display had also been funded by the DoD. Siri was the outcome of a Stanford Research Institute project to develop a virtual assistant for military staff, commissioned by the Defense Advanced Research Projects Agency (DARPA). The touchscreen was the result of graduate research at the University of Delaware, funded by the National Science Foundation and the CIA.”
    ..
    ..
    Mariana Mazzucato, about whom more people should know, on the role of the government in today’s economy.
    ..
    ..
  4. “Back in the early 1970s, Xerox had figured out a strategy to block competitors in the photocopying business. It took out lots of patents, more than 1,000 of them, on every aspect of the photocopy machine. As old patents expired, new ones kicked in at a rate of several hundred new patents each year. Some of the patents were actually used by Xerox in producing the photocopy machine; some were not. There was no serious complaint about the validity of any individual patent. But taken as a whole, Xerox seemed to be using the patent system to lock up its monopoly position in perpetuity. Under antitrust pressure from the Federal Trade Commission, Xerox in 1975 signed a consent decree which, along with a number of other steps, required licensing its 1,700 photocopier patents to other firms.”
    ..
    ..
    Timothy Taylor adds grist to the anti-patent mill.
    ..
    ..
    “Thinking about how to facilitate a faster and broader dispersion of knowledge and productivity gains seems like a potentially important part of explaining the current economic picture and suggesting a policy agenda.”
    ..
    ..
    That’s the concluding part of the blog post. Just sayin’!
    ..
    ..
  5. Every time I begin to think I kind of understand macroeconomics

EC101: Links for 3rd October, 2019

  1. Everything is correlated.
    ..
    ..
  2. For students at Gokhale Institute for sure, but elsewhere too: the Stiglitz essay prize.
    ..
    ..
  3. Capitalim vs Socialism.
    ..
    ..
  4. On reforming the PhD.
    ..
    ..
  5. On complements, substitutes, YouTube and reading.

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.”
    ..
    ..
    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.
    ..
    ..
  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.”
    ..
    ..
    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.
    ..
    ..
  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.”
    ..
    ..
    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!)
    ..
    ..
  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. ”
    ..
    ..
    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.
    ..
    ..
  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.’”)”
    ..
    ..
    Tim Taylor on the difficulty of hiring (and retaining) right.

Links for 31st May, 2019

  1. “For economists, the idea of “spending” time isn’t a metaphor. You can spend any resource, not just money. Among all the inequalities in our world, it remains true that every person is allocated precisely the same 24 hours in each day. In “Escaping the Rat Race: Why We Are Always Running Out of Time,” the Knowledge@Wharton website interviews Daniel Hamermesh, focusing on themes from his just-published book Spending Time: The Most Valuable Resource.”
    ..
    ..
    Almost a cliche, but oh-so-true. The one non-renewable resource is time. A nice read, the entire set of excerpts within this link.
    ..
    ..
  2. ““Bad writing makes slow reading,” McCloskey writes. Your reader has to stop and puzzle over what on earth you mean. She quotes Quintilian: “One ought to take care to write not merely so that the reader can understand, but so that he canot possibly misunderstand.” This is harder than it sounds. As the author of several books, I’ve learned that many readers take out of a book whatever thoughts they took into it. Still, what else is worth aiming for if you want to communicate your ideas?”
    ..
    ..
    As the first comment below the fold says, she herself doesn’t follow her own advice all the time (and yes, that is putting it mildly), but the book that Diane Coyle reviews in this article is always worth your time. Multiple re-readings, in fact. Also, I am pretty good at writing bad prose myself, which is why I like reading this book so much.
    ..
    ..
  3. “Popper acknowledged that one can never know if a prediction fails because the underlying theory is false or because one of the auxiliary assumptions required to make the prediction is false, or even because of an error in measurement. But that acknowledgment, Popper insisted, does not refute falsificationism, because falsificationism is not a scientific theory about how scientists do science; it is a normative theory about how scientists ought to do science. The normative implication of falsificationism is that scientists should not try to shield their theories by making just-so adjustments in their theories through ad hoc auxiliary assumptions, e.g., ceteris paribus assumptions, to shield their theories from empirical disproof. Rather they should accept the falsification of their theories when confronted by observations that conflict with the implications of their theories and then formulate new and better theories to replace the old ones.”
    ..
    ..
    I wouldn’t blame you for thinking that the author of this essay should read the book reviewed above first – but if you aren’t familiar with falsification, you might want to begin by reading this essay.
    ..
    ..
  4. “Upheaval, by Jared Diamond. I’m a big fan of everything Jared has written, and his latest is no exception. The book explores how societies react during moments of crisis. He uses a series of fascinating case studies to show how nations managed existential challenges like civil war, foreign threats, and general malaise. It sounds a bit depressing, but I finished the book even more optimistic about our ability to solve problems than I started.”
    ..
    ..
    Bill Gates has this annual tradition of  recommending five books for the summer – and I haven’t read a single one of the five he has recommended this year. All of them seem interesting – Diamond’s book perhaps more so than others.
    ..
    ..
  5. “Books don’t work for the same reason that lectures don’t work: neither medium has any explicit theory of how people actually learn things, and as a result, both mediums accidentally (and mostly invisibly) evolved around a theory that’s plainly false.”
    ..
    ..
    To say that I am fascinated by this topic is an understatement – and I have a very real, very powerful personal incentive to read this especially attentively. That being said, I can’t imagine anybody not wanting to learn about how we learn, and why we learn so poorly.

Links for 16th May, 2019

  1. “The other risk of a huge centrally planned response to climate change is that of a huge centrally planned response to anything: clumsy megaprojects chosen for their political or bureaucratic acceptability rather than because they deliver the biggest results for the lowest cost.”
    ..
    ..
    In which the ghost of Pigou is found to be giving a contented chuckle. Pigouvian taxes is a term you should learn about, and read this article to find out how and why the idea continues to resonate.
    ..
    ..
  2. “With casuals being the next wave of streaming adopters, their impact will increase. But despite being ‘more valuable’ they will also reduce royalties, because more streams per user means revenue gets shared between more tracks, which means lower per-stream rates. The music industry thus has an apparently oxymoronic challenge: it is not in its interest to significantly increase the amount of media consumption time it gets per user, but instead it will be better served by getting a larger number of people listening less!Current market trajectory points to more streams per user, which – for subscriptions, where royalties are paid as a share of revenue – means lower per-stream rates.”
    ..
    ..
    Have you read The Long Tail, by Chris Anderson? Read it (or about it), and then read this article to learn about the problems that will arise in a world full of long tails.
    ..
    ..
  3. “The answer is no and yes. The views of Piketty and Blanchard can indeed be reconciled, because they are talking about different interest rates. While Blanchard focuses on the rate on low-risk government bonds, Piketty is concerned with the return on risky capital investments. Because the two interest rates are separated by a risk premium of roughly five percentage points, it is entirely possible for the rate on government bonds to be below the economic growth rate, while the rate on capital is above it.”
    ..
    ..
    Barry Eichengreen on the return (as he puts it) of fiscal policy. A short article, but a useful one to understand macroeconomics better.
    ..
    ..
  4. “When historians in the distant future look back at our era, the name Alfred Sauvy may appear in a footnote somewhere. Sauvy was a French demographer who coined the term “third world” in a magazine article in 1952, just as the Cold War was heating up. His point was that there were countries not aligned with the United States or the Soviet Union that had pressing economic needs, but whose voices were not being heard.”
    ..
    ..
    The always excellent Tim Taylor on the nomenclature for “third world” countries – how it came about, what it means, how it might change going forward – and ends with a clarification about how it may not have been what we have thought all along!
    ..
    ..
  5. “I have to tell you, I’m a pretty lazy person, I don’t work more than 40 hours per week. What I’ve discovered helps me is to not compartmentalize – because if I thought of my life as, “there’s teaching, there’s research, there’s writing on my blog, there’s X, Y and Z…” then you very quickly run out of hours in the day. But almost everything I do spills over into almost everything else I do. So I’m constantly looking for ways to take whatever I do and get it to serve three or four or five purposes.”
    ..
    ..
    A fascinating interview with Aswath Damodaran – a person you must know more about if you want to study finance. The entire interview is worth reading – but this excerpt is for you even if you are not a student of finance – his view about what qualifies as work, and what doesn’t.

Links for 13th May, 2019

  1. “There should be limits, too, on the rights investors can sign away. In recent years, some companies — such as Smartsheet and Twilio — have done dual-class issues in which the extra voting rights expire after a certain number of years. These sunset provisions preserve the potential benefits of leaving initial control in the hands of founders, while avoiding the risk of creating a dynastic birthright. That’s a sensible compromise. The Securities and Exchange Commission, or the exchanges it oversees, should make such provisions mandatory.”
    ..
    ..
    A very useful article to help understand how to think about IPO’s, Uber, Lyft valuations, mandatory disclosures from firms and how they try to get around the issue – and the excerpt above is yet another example of a favorite adage of mine: the truth always lies in the middle.
    ..
    ..
  2. “We find that between 1300 and 1400 a 10 percentage point higher Black Death mortality rate was associated with a 8.7 percentage point fall in city population, but between 100 and 200 years later, the impact of mortality was close to zero. When we examine the spillover and general equilibrium effects of the Black Death on city populations, we similarly find negative effects in the short run, and no effects in the long run. Cities and urban systems, on average, had recovered to their pre-Plague population levels by the 16th century.”
    ..
    ..
    A worrying article, especially towards the end, but two major takeaways for me: cities matter, and trade matters. But my major takeaway is there is (yet more) cause for worry.
    ..
    ..
  3. “Unfortunately, the world’s most prominent specialists are rarely held accountable for their predictions, so we continue to rely on them even when their track records make clear that we should not. One study compiled a decade of annual dollar-to-euro exchange-rate predictions made by 22 international banks: Barclays, Citigroup, JPMorgan Chase, and others. Each year, every bank predicted the end-of-year exchange rate. The banks missed every single change of direction in the exchange rate. In six of the 10 years, the true exchange rate fell outside the entire range of all 22 bank forecasts.”
    ..
    ..
    Forecasts are useless. I cannot be more serious when I say this. Forecasts are useless. But foxes are better at the impossible then the hedgehogs – this article helps you understand these terms, and their usefulness. This blog is about becoming a better fox!
    ..
    ..
  4. “Again, one can argue that the amount of redistribution should be larger. But it would be untrue to argue that a significant amount of redistribution–like doubling the after-taxes-and-transfers share of the lowest quintile–doesn’t already happen. ”
    ..
    ..
    The always informative Timothy Taylor on taxes, their composition, their effectiveness and the resulting redistribution in the United States of America. Also, read the book that is reviewed in this article – the entire book is worth your time, but the chapter on income tax is what I was reminded of.
    ..
    ..
  5. “When Paul Romer expresses an opinion, it is always worthwhile to listen because it is always well-considered. In an opinion piece in the New York Times, he puts forward a proposal to restore what he terms is the “public commons” of the provision of information in support of democracy. He actually puts forward two linked proposals: one for a target on targeted ads by digital platform companies and a proposal that the tax is progressive (which may be a check on dominance). The latter is interesting but I will just focus on the former here.”
    ..
    ..
    I do not recollect if I linked to the Paul Romer piece that is linked to in the excerpt above – in case I did not, please go ahead and read it. The rest of the current article speaks about why Romer’s proposal is a good idea, but not necessarily implementable right away.

Links for 1st May, 2019

  1. “As McKinsey points out, governments, businesses and individuals will all have to embrace change and figure out the best ways to move towards digitisation — including on such basics as land records and business transparency (which could improve access to bank credit). There are also many aspects of this wave of digitisation that are not to the good—including the impact of toxic social media, the loss of privacy, and so on. The rules for this new world will have to be framed carefully to prevent business capture as well as political misuse, and to protect citizens from predatory action. What is required is to minimise the costs as much as to maximise the benefits. Still, the over-riding message is clear: The prospects of digitisation are so overwhelmingly advantageous, if not also inevitable, that those who become laggards in adapting to the new reality are the ones that will be left behind.”
    ..
    ..
    T N Ninan (author of the excellent The Turn of the Tortoise) writes about the potential of “digital” India while reviewing a McKinsey report about the same topic. The scope, details and aspects of such a topic simply cannot be dealt with in a single post – but with that in mind, this is worth reading.
    ..
    ..
  2. “The Right to Education Act in 2009 guaranteed access to free primary education for all children in India ages 6-14. This paper investigates whether national trends in educational data changed around the time of this law using household surveys and administrative data. We document four trends: (1) School-going increases after the passage of RTE, (2) Test scores decline dramatically after 2010, (3) School infrastructure appears to be improving both before and after RTE, and (4) The number of students who have to repeat a grade falls precipitously after RTE is enacted, in line with the official provisions of the law.”
    ..
    ..
    That is the abstract of this paper. Also, have you read this book? Also, have you listened to this podcast? Also, keep an eye out for this Sunday’s video.
    ..
    ..
  3. “China’s TFP surged in the 1980s following the agricultural and ownership reforms, in the 1990s following the state enterprise reforms and the creation of a modern housing market, and in the 2000s as China prepared for and was then able to exploit WTO membership.The key takeaway is that China’s one-party system deservedly has won plaudits when it has been most ambitious with regard to economic reforms and experimentation with market mechanisms. But this is not the case, for example, before the 1980s and again since 2012, when reforms were suppressed or stifled and inputs were boosted, but without any improvements.”
    ..
    ..
    An interview that remains interesting throughout if you are a student of economics, or China and especially the intersection set. Troubling times ahead for the Chinese economy, it would seem – and on account of a variety of short term reasons, and one very important long term one – TFP.
    ..
    ..
  4. “That was when he saw the light. Two small, black, rectangular boxes were stacked next to an outlet on the far side of the guest room, both facing the bed. From afar, they looked like phone chargers. But when Vest got closer, he realized they were cameras, and they were recording.”
    ..
    ..
    Airbnb, technology, privacy and customer relations. A great way to learn that There Is No Such Thing As A Free Lunch.
    ..
    ..
  5. “In 1960, 13.4% of the population age 20-74 was obese (as measured by having a Body Mass Index above 30). In 2016, 40% of the population was obese.
    In 1970, 37.1% of those age 18 and older were cigarette smokers. By 2017, this has fallen to 14.1%.”
    ..
    ..
    Just two out of many, many interesting tidbits about America today, and America back then.

Links for 25th April, 2019

  1. “Singapore appreciates the relative strengths and limits of the public and private sectors in health. Often in the United States, we think that one or the other can do it all. That’s not necessarily the case.”
    ..
    ..
    It is always a good idea to learn about Singapore’s healthcare system, and this Upshot column from the NYT helps in that regard. Each of the links are also worth reading. If you spend time reading through the article and all the links therein, you might be a while, but it is, I would say, worth it.
    ..
    ..
  2. “With Nobel laureate Daniel Kahneman, he collected evidence on happiness that remains my benchmark for social scientists’ ability to shed light on wellbeing. Prof Kahneman once warned me that expert advice can go only so far. Much happiness and sadness is genetically determined: “We shouldn’t expect a depressive person to suddenly become extroverted and leaping with joy.” Those words are much on my mind this week.”
    ..
    ..
    Tim Harford remembers Alan Kreuger, and helps us understand a lot about the man, his work, happiness and much else in the process. Entirely worth reading.
    ..
    ..
  3. “The Captain Swing riots are thus one more example, an especially vivid one, that new technologies which cause a lot of people to lose a way of earning income can be highly disruptive. The authors write: “The results suggest that in one of the most dramatic cases of labor unrest in recent history, labor-saving technology played a key role. While the past may not be an accurate guide to future upheavals, evidence from the days of Captain Swing serve as a reminder of how disruptive new, labor-saving technologies can be in economic, social and political terms.”
    ..
    ..
    One, because reading something you hadn’t read before is always interesting. Two, because unemployment because of automation isn’t new. Three, makes for very relevant reading today (in multiple ways: automation itself, but also untangling causality.)
    ..
    ..
  4. “He says he was inspired by the depth of the nun’s commitment to India’s least fortunate—but he was unwilling to emulate her approach, and not simply because of its material sacrifices. Although Shetty often performed free surgeries for the poorest of the poor, he reasoned that the only way to sustainably serve large numbers of people in need was to make it a business. “What Mother Teresa did was not scalable,” he says—perhaps the first time venture capital jargon has been applied to the work of the Angel of Calcutta.”
    ..
    ..
    Interested in healthcare, or economics, or both? A lovely read, in that case. Also a good explainer of the challenges in front of Modicare.
    ..
    ..
  5. “The argument in favour of having Tribunals is that they offer a specialised and dedicated forum for settling specific categories of disputes which are otherwise likely to get stuck in the regular judicial channels. But this assumption holds only if the regular judiciary exercises restraint and does not insert itself into the proceedings pending before Tribunals. ”
    ..
    ..
    The problem with laws in India isn’t their framing – it is their implementation. Read this to find out more.

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. ”
    ..
    ..
    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.
    ..
    ..
  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.”
    ..
    ..
    Opportunity costs, population density, gentrification, urbanization and reducing family size – all there in this information dense article.
    ..
    ..
  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.”
    ..
    ..
    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.
    ..
    ..
  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).”
    ..
    ..
    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.
    ..
    ..
  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.”
    ..
    ..
    International finance meets the Belt and Road Initiative. Who will win, and in what shape, is what the article speaks about.

Links for 13th March, 2019

  1. “For most projects I’ll never look at anything in ARCHIVES again. But of course it’s easy to do so if I want to. And the fact that it’s easy is important, because it means I don’t have nagging concerns about saying “this is finished with; let’s put it in ARCHIVES”, even if I think there’s some chance it might become active again.As it happens, this approach is somewhat inspired by something I saw done with physical documents. When I was consulting at Bell Labs in the early 1980s I saw that a friend of mine had two garbage cans in his office. When I asked him why, he explained that one was for genuine garbage and the other was a buffer into which he would throw documents that he thought he’d probably never want again. He’d let the buffer garbage can fill up, and once it was full, he’d throw away the lower documents in it, since from the fact that he hadn’t fished them out, he figured he’d probably never miss them if they were thrown away permanently.”
    It is exhausting just reading it, but a very long article from Stephen Wolfram o how he organizes his life. You don’t have to go quite as all out – but you might learn a trick or two about organizing your life better by reading this article. God knows I need all the help I can get.
  2. “Nonetheless, this work suggests a potentially serious problem. Many situations in economics are complicated and competitive. This raises the possibility that many important theories in economics may be wrong: If the key behavioral assumption of equilibrium is wrong, then the predictions of the model are likely wrong too. In this case new approaches are required that explicitly simulate the behavior of the players and take into account the fact that real people are not good at solving complicated problems.”
    If I was to be (excessively?) cynical, I’d say this would mean that economists know nothing. But that isn’t necessarily true – Herbert Simon’s work on bounded rationality come to mind here. But the article is interesting about how to think about excessively complicated stuff – such as life.
  3. “In a low-saving, low-investment economy like the US, it’s a little hard to conceive that its possible for savings and investment rates to be too high for a country’s economic health. But that’s where China has been, and shifting away from established patterns is rarely simple.”
    To range across domains, there is this line from dietary studies that goes something like this: “It is the dose that makes the poison”. But if the USA suffers from too low a savings rate (maybe), China has the opposite problem. And this article does a great job of explaining the how and the why.
  4. “Historically, interim budgets in India have consistently overestimated revenue growth and underestimated expenditure growth. An analysis of the projected, revised, and actual budget figures since 1991 by Deepa Vaidya and K. Kangasabapathy of the EPW Research Foundation showed that deviations from budget estimates tend to be extraordinarily high for budget estimates presented in interim budgets ”
    This should surprise nobody, but budgets shouldn’t be trusted. Households budgets tend to have the same biases and errors that government budgets do, and for mostly the same reason – they’re drawn up by humans, who will be tempted to gloss over inconveniences. This article is full of interesting infographics that help you understand this point better – and also makes the point that an independent fiscal council is both necessary and overdue. I wouldn’t hold my breath.
  5. “But as the global giants arrive, they have been driving up salaries, rents, and reputations. Now some fear that the multinationals that once nurtured this fledgling technology powerhouse are unwittingly damaging the potent but fragile mix of entrepreneurship, military training, and chutzpah that drew them to it in the first place. That, they worry, could prevent it from developing into a mature digital economy.”
    Can you guess, before you click on the link, which country we’re talking about? Reading this article should make you want to read more about industrial organization, low interest rate environments, and urbanization – three of the biggest issues in economics today.