ROW: Links for 17th July, 2019

  1. “A politically divisive debate continues to rage over U.S. President Donald Trump’s push to add a citizenship or nationality question to the U.S. census.That same question has been part of Canada’s long-form census for over a century without a ripple, although it’s not part of the short-form questionnaire.”
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    Via MR, an article that helps you learn that the citizenship question has been around for a while now.
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  2. “Not asking about citizenship seems to signify an attitude toward immigrants something like this: Get them in and across the border, their status may be mixed and their existence may be furtive, and let’s not talk too openly about what is going on, and later we will try to get all of them citizenship. Given the current disagreement between the two parties on immigration questions, that may well be the only way of getting more immigrants into the U.S., which I hold to be a desirable goal. But that is a dangerous choice of political turf, and it may not help the pro-immigration cause in the longer run.”
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    And here’s why Tyler Cowen linked to the piece we added above in the first place.
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  3. “The Indian Rupee will now be accepted for transaction at all airports in Dubai, according to a leading newspaper in the United Arab Emirates.The acceptance of Indian currency is good news for tourists from that country as earlier they lost a sizeable amount due to exchange rates, sources said.”
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    On the growing importance of India in the global scheme of things…
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  4. “By demanding that schools provide opportunities for young girls to play sports and mandating that universities provide equal scholarship funding for women, title IX created opportunity and incentive for girls to play sports. Suddenly, not only were energetic, athletic girls given the same opportunities to play as the boys were, but they also had the opportunity for their sporting talent to fund their educations through scholarships.”
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    Policies, politics, Title IX and the recently concluded World Cup.
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  5. “Yan said the data shows that housing prices have “decoupled” from income, and are instead driven by access to capital – giving investors a clear advantage over average Canadians. “It’s not about supply or demand any more,” said Yan. “It’s: who are we building for?””
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    Circling back to Canada, this time about housing and its excesses. This has a familiar ring to it…
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Etc: Links for 12th July, 2019

  1. “Often failure is simply failure, and a setback is exactly what it seems. But sometimes the obstacle that has been placed in our path might provoke us to look around, and perhaps to discover that a better route was there all along.”
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    Tim Harford on the Doris Day effect
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  2. “If I have to be curt, they’re famous for being famous. Another way of understanding how a family (+ dogs+friends+assistants) has risen to unprecedented levels of fame and fortune is by the Principle of Cumulative Advantage. This principle is also known as the Matthew Effect, and refers to the phenomenon of those who already have an advantage acquiring more of it. This concept is applicable to both financial and social capital.”
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    …and since the previous article mentioned it, Reshu Natani in Think Pragati on the Matthew Effect.
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  3. “The last time I saw Bourdain was a few months ago, at a party in New York, for one of the books released by his imprint at the publishing house Ecco—of his many projects, his late-career role as a media rainmaker was one he assumed with an almost boyish delight. At the bar, where I’d just picked up my drink, he came up and clapped me on the shoulder. “Remember when you asked me if I was a feminist, and I was afraid to say yes?” he said, in that growling, companionable voice. “Write this down: I’m a fuckin’ feminist.”
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    A lovely essay on the late Anthony Bourdain. Just in case you haven’t, do read this – the article that started it all.
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  4. “5-MeO-DMT is produced in large amounts by Bufo alvarius, a rare species of toad commonly known as the Colorado river toad or the Sonoran desert toad. When preyed upon, the toad secretes a venom that repels predators by causing them to, in scientific terms, trip balls. Psychonauts discovered that you can milk the toads’ venom, dry it out, and smoke it. The substance’s close relative, DMT, is an active ingredient in the traditional shamanic brew known as ayahuasca, but what they say about smoking the toad is that it’s like riding a rocket to the same place of total ego death that ayahuasca takes you to by riverboat.”
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    That, the excerpt above, is not what this article is about. It is about Mike Tyson. He, as the title says, smokes the toad.
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  5. “There are many ways to achieve success and fulfillment that do not involve attending an elite college. Instead of encouraging people to pursue options well-matched to their abilities, however, we tell young people that their self-worth hinges entirely on the brand name on their college diploma. This creates a perverse incentive to do whatever it takes to get into their dream school, to amass tens of thousands of dollars in student loans, and to select a major based not on the professional opportunities it will open to them but on the ease of the program’s academic requirements. Small wonder we now have a generation drowning in debt and struggling to meet the traditional benchmarks of adulthood.”
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    A long, but very reasoned rant about education in America, and about how it isn’t quite as good as it is made out to be. Also, that rare article that distinguishes between education (teaching) and research.

EC101: Links for 11th July, 2019

  1. “The two approaches reflect different attitudes toward risk, the role of government and collective social responsibility. Analogous to America’s debate over health insurance, the American philosophy has been to make more resilient buildings an individual choice, not a government mandate.”
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    Risk, how (not) to measure it and therefore understand it. As Taleb is fond of saying, “The absence of evidence is not the evidence of absence”.
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  2. “Is it possible that interest rates are a net input cost in the Indian context? This existential monetary question is yet to be even acknowledged by economists, let alone addressed.”
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    A superb (and I use the word advisedly) overview of monetary policy and how it works in India.
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  3. “I would challenge my students at the start of the new semester with the following three questions; 1) how much does it cost you to go to the beach (we lived in a coastal city)? 2) should Tiger Woods mow his own lawn? or 3) should Lebron and Kobie go to college?”
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    Opportunity costs, economic costs and accounting costs – all in one article, and therefore a great read.
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  4. “The cornerstone of Harvard professor N. Gregory Mankiw’s introductory economics textbook, Principles of Economics, is a synthesis of economic thought into Ten Principles of Economics (listed in the first table below). A quick perusal of these will likely affirm the reader’s suspicions that synthesizing economic thought into Ten Principles is no easy task, and may even lead the reader to suspect that the subtlety and concision required are not to be found in the pen of N. Gregory Mankiw.”
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    A hilarious (but perhaps only to an economist) take on the ten principles of economics.
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  5. “And the long version of the history is crucial here. It shows that for much of the 20th century, total taxes on the very wealthy were much higher than they are now. Before World War II, the average rate hovered around 70 percent. From the mid-1940s through the mid-1970s, the average rate was above 50 percent.”
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    David Leonhardt on taxing the rich in America. His newsletter is worth subscribing to, by the way.

ROW: Links for 10th July, 2019

  1. “The radio station, whose call letters are KHIL, has long been the daily soundtrack for this frontier town (population 3,500) that prides itself on its cowboy culture and quiet pace of life. But six decades after the founding of the station, the property is in foreclosure, with utility disconnect notices coming nearly every month.”
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    Culture and Coase (an updated version) in rural America. For both of these reasons and more, worth your time.
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  2. “When Amnesty International U.S.A. started looking for a new headquarters in New York City, the human rights group settled on office space in a modest skyscraper in Lower Manhattan known as Wall Street Plaza.But just as the organization was about to sign a lease last week, the building’s owner said that its new parent company, a giant shipping conglomerate owned by the Chinese government, decided to veto the offer. The company, Cosco Shipping, did not want the United States chapter of Amnesty International, which has produced scathing reports highlighting human rights abuses in China, as a tenant, according to the group.”
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    Business, culture, nationalism, America and China.
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  3. “When you’re doing everything wrong, the best way to fix the problem isn’t usually to go through the list of things you’re doing wrong and fix them one by one. It’s best to step back and ask why you’re so bad at everything, whether a systemic problem is causing you to make so many separate mistakes. And in the case of the MTA, the root cause of its capital-construction failures is usually diagnosed as unaccountability: Nobody knows who’s in charge, so nobody has to be terrified of taking the blame for obscene costs and endless delays.”
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    Coordinating stuff is hard. The New York version of this story. Also, this is why Singapore deserves all the admiration it gets (and more)
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  4. “During the French referendum on the Treaty of Maastricht in 1992, we observed that 60% of the voters with the lowest incomes, personal wealth or qualifications voted against, whereas the 40% of the electorate with higher incomes voted in favour; the gap was big enough for the yes vote to win with a small majority (51%). The same thing happened with the Constitutional Treaty in 2005, except that this time only the top 20% were in favour of the yes vote, whereas the lower 80% preferred to vote no, whence a clear victory for the latter (55%). Likewise for the referendum on Brexit in the UK in 2016: this time it was the top 30% who voted enthusiastically to remain in the EU. But, as the bottom 70% preferred to leave, the leave vote won with 52% of the votes.”
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    An article which helps you think a little bit more about the European Union and what plagues it.
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  5. “China’s overall external surplus is down. That’s not surprising—China’s general government deficit is somewhere between 4 percent of GDP and 12 percent of GDP, depending on what measure you use. The gap between China’s fiscal stance and that of Korea is even bigger than the gulf between Germany’s surplus and the deficit of France—and the gap between the euro area’s (tight) overall fiscal stance and the much looser stance of the United States.But the surplus of China’s neighbors, who have responded, in many cases, to the “rise” of China with policy stances designed to maintain weak currencies and protect their exports, has soared over the past ten years, and now is substantially larger than it was prior to the global crisis.”
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    A useful article about Korea’s macroeconomic choices, and the reasoning behind them.

RoW: Links for 26th June, 2019

Articles from the Far East in today’s edition:

 

  1. “Thus is revealed a deeper lesson still: Freedom is not merely the ability to buy and sell goods at minimum regulation and a low tax rate, variables that are readily picked up by economic freedom indices. Freedom is also about the narratives people live by and the kind of future they imagine for themselves. Both of these are greatly affected by the legitimacy and durability of their political institutions.”
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    There’s lessons to be learned for all nations from what is going on in Hong Kong today, and Tyler Cowen ably lays out a map. In short, political institutions really matter – and that is a truly important lesson for anybody who wishes to learn economics.
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  2. “There were three such commitments: “to establish new U.S.–DPRK relations,” “to build a lasting and stable peace regime on the Korean Peninsula,” and “to work toward complete denuclearization of the Korean Peninsula.” The North also pledged to unearth the remains of Americans missing in action, which could help put the Korean War to rest—and not just for those most intimately affected.”
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    From about two weeks ago, but worth reading to get a sense of where North Korea and America are today, relative to where they thought they would be.
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  3. “At 12:42 a.m. on the quiet, moonlit night of March 8, 2014, a Boeing 777-200ER operated by Malaysia Airlines took off from Kuala Lumpur and turned toward Beijing, climbing to its assigned cruising altitude of 35,000 feet. The designator for Malaysia Airlines is MH. The flight number was 370. ”
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    This came out about a week ago, and if you are at all on social media, you’ve probably read it already, but on the off chance that you haven’t: a haunting coda to the sorry saga that is MH370.
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  4. “Beijing’s increasing heavy-handedness is more a symptom of fear than strength. It is borne in part from anxiety about the global trend of power diffusing from governments to non-state actors, a development that runs against the Communist Party’s desire to keep a tight grip on society. It also arises out of the Communist Party’s deep-seated concern that its legitimacy will come under scrutiny, particularly as economic growth continues to decelerate. Beijing’s endemic challenges in enforcing discipline within the Communist Party, particularly as it relates to corruption, also arouses anxieties. So, too, does latent admiration within Chinese society for values that America has sought to advance, even as popular views of the United States government come under fresh scrutiny.”
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    An interesting take on how to view Chinese culture, American culture, and how they evolve in response to each other, and each other’s forms of government.
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  5. “I was given time to try and log in again the next day after my penalty had been served.When I did I had to push “agree and unblock” under the stated reason of “spread malicious rumours”.
    So this rumour-monger clicked on “agree”.
    Then came a stage I was not prepared for. “Faceprint is required for security purposes,” it said.
    I was instructed to hold my phone up – to “face front camera straight on” – looking directly at the image of a human head. Then told to “Read numbers aloud in Mandarin Chinese”.”
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    The surveillance state in China, it’s capabilities, and it’s potential threats. All on China’s most popular app.

ROW: Links for 19th June, 2019

This week, here’s a selection of five articles that help you understand issues in America a little bit better.

 

  1. “The old consensus that the US needed to help address the “root causes” of migration, by investing in the Northern Triangle countries and making it more appealing for people to stay, was never supposed to be an immediate solution to anything. Of course, Trump’s view of migration makes it less likely that anyone will be able to start work on long-term solutions that might bear fruit down the road. It is almost certainly, in the meantime, going to get worse before it gets better.”
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    Vox gives us a clearer picture on the migration crisis at the southern US border. Yes it is bad, yes, there is a crisis, and yes, it likely will get much worse before it gets a little better, for a variety of reasons. All of which are explained in this piece.
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  2. “Of course, if it hadn’t been for Roe, there also wouldn’t have been more than 50 million abortions since 1973; whether that’s a good or bad thing will be left as an exercise for the reader. But many abortions would have been performed anyway, because before the court took the issue away from voters, polls showed public opinion steadily trending in favor of legalized abortion, and the procedure was already legal in several states.”
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    Are you familiar with Roe v Wade? If you aren’t, read up about it first. Then read up about what Alabama is up to today. And finally read this article. And also consider following Megan McArdle (the author of this piece)
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  3. “Rather, regardless of what any deal achieves, the two nations appear to have entered a protracted era of competing for technological advantage, in areas ranging from aerospace and telecommunications to artificial intelligence, all with big military as well as commercial implications. Managing tensions over the issue is an increasingly important part of the U.S.-China relationship, for both sides.”
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    The Christian Science Monitor on what the trade war, or the new cold war (or whatever else it is that you want to call it) really is all about.
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  4. “This resonates with my own view. A large, established enterprise can be thought of as a cultural institution, with particular rules, norms, systems, processes, and institutional knowledge ingrained throughout the firm. In a stable environment, this corporate culture is a valuable asset. But as the business environment evolves, a firm’s culture can inhibit its ability to adapt. Cultural assets can depreciate, and one of the most difficult tasks for top management is to know when and how to replace elements of a culture that otherwise had served to keep the enterprise sturdy and reliable.”
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    Arnold Kling reviews a book that has appeared on these pages before, but the reason I put this article up here is because it helps you understand an important point about America today: it’s reviling of the corporate culture is very real – and Tyler Cowen says perhaps misplaced. Useful to think about how one should think about what made America great, and how perhaps it is changing – for the better or otherwise is your opinion entirely.
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  5. “Before I left, I asked the black waiter, Darick Thomas, how he felt about my hat. “I don’t care. At all. Really. At all! I look at a hat and that doesn’t tell me who the person is,” he said. “I’m not against Trump. He says some smart things; he says some dumb things.” Darick didn’t vote. “Voting is the illusion of choice for the masses,” he explained.”
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    What happens if you were a MAGA hat in a famously liberal restaurant in LA? This is, of course, at best an anecdote – but an enjoyable one, nonetheless.

EC101: Links for 13th June, 2019

  1. “A September 2018 article from Eater tells us that Miguel Gonzalez delivers directly to 120 New York restaurants. As an avocado supplier, he works with farms in Mexico’s Michoacán state. To maintain consistency and minimize bruising, he monitors truck temperatures and how the boxes are stacked during their 2600 (or so) mile journey.”
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    What happens when you raise the tariff on a commodity? Who do you think will (ultimately) pay? Econ texts give you the answer – this article provides an example.
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  2. “Across the United States, a similar cocktail seems to be keeping inflation at bay: Employers are reluctant to charge more, unsure how consumers will react, and they’ve found an untapped supply of workers. It’s partly great news. More Americans are getting jobs than policymakers once thought possible, and wages and prices aren’t spinning out of control the way history would predict.”
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    Think you know macroeconomics? Short answer: you never really do. The NYT provides an example of a conundrum that is keeping the Federal Reserve up at night: full employment, low inflation. A nice problem to have, right? You’d have thought so…
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  3. “Economists have written about topics that we would now classify under the headings of “microeocnomics” or “macroeconomics” for centuries. But the terms themselves are much more recent, emerging only in the early 1940s. For background, I turn to the entry on “Microeconomics” by Hal R. Varian published in The New Palgrave: A Dictionary of Economics, dating back to the first edition in 1987.”
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    On the etymology of micro and macroeconomics.
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  4. “Belloy’s misfortune stemmed from more than bad luck. He was the victim of unscrupulous traders known simply as operators, who might sell fake elevator receipts, or move prices in their favor by spreading false news. Or they might pull off an especially cunning manipulation known as a corner, in which they would buy future wheat while simultaneously buying all physical wheat.Later, when it came time for the operator to take delivery of his future wheat, the other trader had to first go buy some. But there was none. The operator owned it all. Thus trapped, or cornered, the victim had no choice but to pay whatever price the operator demanded. Cornering was the ruin of many a trader, like our Belloy, to whom the only apparent recourse was to find the nearest saloon and shoot himself in the head.”
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    Rarely are classes in financial economics so very entertaining. A lovely history (maybe apocryphal, who knows) about the early days of the CBOT in Chicago.
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  5. “There is no simple remedy for the curse of knowledge, but let me offer a suggestion. Keep a particular person in mind as you teach. That person should be someone you know well—a parent, a spouse, or a best friend (as long as that person is not an economist). Pretend you are explaining the material to them. Are they getting it, or are they lost? If you know this person well, you may be able to more easily empathize with their learning challenges. You might prevent
    yourself from going overboard.”
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    N. Gregory Mankiw comes up with a short six point guideline about how to teach economics better. It is worth going over this list, irrespective of whether you are learning economics or teaching it. Also, taken a look at Eli5?