This weekend's NYT Magazine features a personal account of easy credit, then subsequent trials and tribulations with mortgage lending by an solidly middle-class economics reporter.
Required reading for a personal finance module in a macroeconomics course?
Thursday, May 14, 2009
Wednesday, May 13, 2009
Life course heterogeneity
David Brooks writes about the Study of Adult Development or the "Grant Study" of a Harvard College cohort, which is also profiled in depth in the Atlantic.
Today I had a discussion about this article with a biologist friend of mine, and we had two fairly different and equally valid interpretations of it. On the one hand, the study seems to provide a wealth of examples of how much innate uncertainty there seems to be in life, impinging differently upon individuals no matter how similar they may appear to be. On the other hand, one wonders how much unobserved heterogeneity there is among Harvard alumni of a particular cohort. As Brooks points out, for example, many of them had skeletons in the family closet, so to speak, as did the primary researcher in charge of the project.
What is the best design for research and policy? Identifying the background characteristics that can lead to adult outcomes, or the shocks that produce them, or figuring out what helps adults weather them best?
Today I had a discussion about this article with a biologist friend of mine, and we had two fairly different and equally valid interpretations of it. On the one hand, the study seems to provide a wealth of examples of how much innate uncertainty there seems to be in life, impinging differently upon individuals no matter how similar they may appear to be. On the other hand, one wonders how much unobserved heterogeneity there is among Harvard alumni of a particular cohort. As Brooks points out, for example, many of them had skeletons in the family closet, so to speak, as did the primary researcher in charge of the project.
What is the best design for research and policy? Identifying the background characteristics that can lead to adult outcomes, or the shocks that produce them, or figuring out what helps adults weather them best?
Sunday, May 10, 2009
New Yorker on neuroscience: amputee pain, creativity
Last week's New Yorker includes an article on neuroscience that is interesting in at least two regards.
One topic discussed is the plasticity of the brain over time, and how amputated limbs, which are a burden borne particularly by veterans, can over time be associated with very real pain in the phantom appendage. Surprisingly, a treatment that seems to work, according to a 2007 letter in the New England Journal of Medicine, is with "mirror therapy," which fools the brain into seeing the missing appendage and realizing the pain isn't really there. This echoes back to Atul Gawande's haunting New Yorker piece last year, "The Itch."
Another topic discussed by the subject of the article, UCSD's Dr. Ramachandran, is the origin of at least one kind of creative genius, that of coming up with a really good metaphor, connecting different types of reasoning and perception. He guessed that it might be due to physical intra-brain connections that could be somewhat hereditary or mutative.
One topic discussed is the plasticity of the brain over time, and how amputated limbs, which are a burden borne particularly by veterans, can over time be associated with very real pain in the phantom appendage. Surprisingly, a treatment that seems to work, according to a 2007 letter in the New England Journal of Medicine, is with "mirror therapy," which fools the brain into seeing the missing appendage and realizing the pain isn't really there. This echoes back to Atul Gawande's haunting New Yorker piece last year, "The Itch."
Another topic discussed by the subject of the article, UCSD's Dr. Ramachandran, is the origin of at least one kind of creative genius, that of coming up with a really good metaphor, connecting different types of reasoning and perception. He guessed that it might be due to physical intra-brain connections that could be somewhat hereditary or mutative.
U.S. saving rates on the rise
Today's paper discusses rising household saving rates in response to the recession and financial crisis. How high will it go? What are the implications for GDP growth, if any?
Solow/Ramsey model, anyone?
Solow/Ramsey model, anyone?
Saturday, May 9, 2009
NYT on the Credit Crisis
Thanks to Greg Mankiw for posting the link to the New York Times's overview of the 2008 credit crisis.
David Brooks raises awareness, maybe so do charter schools
David Brooks writes about a study by Harvard economists Will Dobbie and Roland Fryer on the effectiveness of Harlem Children's Zone schools. Harsh as it may sound, the fact that some charter schools were filled by random lottery assignment makes assessing the effect of the schools much more plausible.
The authors compare educational outcomes among lottery winners to lottery losers, which means they're conditioning on having wanted to enter the school to begin with. They also pursue an instrumental variables strategy on a broader set of kids, with a geographic instrument that's meant to measure outreach or "pitching" of the school, which is an interesting notion.
Can motivation be instilled or does it have to be home-grown within kids? I think they're saying it can be the former.
The authors compare educational outcomes among lottery winners to lottery losers, which means they're conditioning on having wanted to enter the school to begin with. They also pursue an instrumental variables strategy on a broader set of kids, with a geographic instrument that's meant to measure outreach or "pitching" of the school, which is an interesting notion.
Can motivation be instilled or does it have to be home-grown within kids? I think they're saying it can be the former.
Friday, May 1, 2009
The origins of creative innovation
Today David Brooks writes about "the modern view of genius," or rather his view of it, which is that creativity can derive from hard work and dedication rather than from an inherent gift.
The implications are frankly rather reassuring in a way: if you work hard, you will "get it." I doubt this is exactly what he meant, but it's a fair reading of the piece. To be sure, Brooks also writes about patience and delayed gratification, things that economists would call preferences, and perhaps what's really going on is that some people are naturally gifted with patience. But like a good social conservative, Brooks also points out the roles of parents in fostering the hard work.
It would be a mistake to argue that because inherent gifts are so important, we shouldn't care about interventions that increase hard work and patience. But I find this "modern view" unconvincing. There are many routes to creative productivity, and not all of them are 99% perspiration. The work of David Galenson and others in identifying different creative processes of great artists and thinkers is instructive here.
The implications are frankly rather reassuring in a way: if you work hard, you will "get it." I doubt this is exactly what he meant, but it's a fair reading of the piece. To be sure, Brooks also writes about patience and delayed gratification, things that economists would call preferences, and perhaps what's really going on is that some people are naturally gifted with patience. But like a good social conservative, Brooks also points out the roles of parents in fostering the hard work.
It would be a mistake to argue that because inherent gifts are so important, we shouldn't care about interventions that increase hard work and patience. But I find this "modern view" unconvincing. There are many routes to creative productivity, and not all of them are 99% perspiration. The work of David Galenson and others in identifying different creative processes of great artists and thinkers is instructive here.
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