Krueger on CEA stint

Here's a fun interview with Alan Krueger on his time in Washington at the CEA.

Could Congress pass Social Security today?

A great point by David Brooks today, that it's hard to see how a large safety net program like Social Security could ever pass in Congress today given the atomistic trend in American life.

Death rates by veteran status in California

The LA Times reports on death rates among Californian veterans and nonveterans under 35. Higher suicides and accidents among vets, but lower homicides and all other causes, the latter surely a "healthy warrior" effect. Lower risk of homicide was most interesting to me, and I wonder whether it's a deterrent effect, or maybe a place-of-residence effect.

New blood pressure guidelines

JAMA published new blood pressure guidelines from JNC 8 that moved targets somewhat higher for older hypertensive patients. A great quote in this NYT article covering the announcement mentions the old "folk medicine" that focused on systolic BP alone and aimed for "100 plus your age." Heaven help the centenarians!

Growth is indeed different than levels....

Yesterday in the WSJ the UK's Chancellor of the Exchequer hailed "how Britain returned to growth," only the UK has yet to regain the level of GDP in early 2008.  Here is a graphic showing GDP in the US and UK as percentage points of peak levels, and while growth has been a little more rapid recently, the overall picture is really depressing, pun intended.

I'm not sure how one can ingenuously praise austerity measures for saving the day if it appears that they did not. It's also strange to see a call for greater foreign direct investment in the UK, or a capital account surplus, at the same time as a desire for increased exports, or a current account surplus as well. That's not going to be easy to pull off.

Obamacare bites blue

The Times reports on traditionally Democratic leaning New Yorkers whose health insurance plans are being canceled because of the need to balance the risk pool in the exchanges. I'd be bothered too if my insurance costs rose, and it's probably a good thing that some of the adjustment costs associated with reform are being felt by elites.

Geographic mobility takes a dive

New postwar lows in mobility, according to this article in the Times. I wonder how moves associated with college education or first job after college might have changes, or if that typically isn't a large part of it.

Or they're hiring it done

In "The Case for Filth", novelist Stephen Marche provides a tidy overview of trends in time use and housework in particular. But I'm not sure whether a decline in female self-reported housework means women are in fact just living with filth, unless of course we're referring to a pejorative about lazy males, rather than increasingly hiring it done!

Obamacare, civic duty, and warm-fuzzy feelers

Today Ross Douthat questions whether enough eligible people nationwide will opt-in to Obamacare, doing their civic duty and feeling warm and fuzzy in the process.  He references Matt O'Brien in the Atlantic, who cites Martin Feldstein's perspective that the tax penalties may not be high enough to compel the young and healthy to opt-in.

How much compliance will there be?  Here's a fun graphic from USA Today depicting rates of uninsured motorists by state.  Compare that to this graphic from July 2013 showing acceptance of Obamacare's Medicaid expansion. They certainly don't show the same geography of political economy, but there are some echoes and it's a fun juxtaposition.

Beer-thadone for alcoholics

Today's NYT reports on a beer-for-work program in the Netherlands inspired by similar efforts in Canada and ultimately by methadone programs for heroin users. It's a sad and uplifting read at the same time.

P.J. O'Rourke, demographer

The WSJ ran excerpts of PJOR's latest book, which is about the baby boom, on Sunday. The book is out this month.

Moneyball + Cardiogram = Moneygram?

On Friday, Penn's Jason Karlawish wrote in the Times about the American College of Cardiology's recently issued new guidelines about cardiovascular health screening and statins, and its 2013 cardiovascular risk calculator based off of research using the Framingham Heart Study. Karlawish calls it a move away from "nuanced diagnosis and treatment" and toward "Big Data" and medicine's "becoming the science of an insurance actuary."

He references the Oakland Athletics and Moneyball as the parallel in baseball, but I'm not sure the comparison is complete. I like what Karlawish has to say about how people have a hard time understanding qualitative or quantitative assessments of risk. But I think that's an argument for using quantitative assessments rather than against, at least through the lens of the Oakland A's. The argument of Moneyball was precisely the point that subjective judgments tend not to be very good because the beholder sees what he or she wants to see.

It's certainly true that creating a statistical tool does not solve the problem of helping patients and their families understand the risk, just like how giving a laptop and a bunch of Sabermetrics to a baseball front office will not necessarily improve a team's record. But it seems to be a step on the road in the right direction.

Adjunct vs. tenured teaching quality

Thanks to a student who alerted me to the Times Sunday dialogue this week, which includes a bunch of opinions about interpreting a recent NBER working paper showing small gains in subsequent grades and increased probability of further study in the topic associated with adjunct teachers at Northwestern University. There is a lot one could say about this and broader issues about the move toward employing more part-time faculty especially at the lower end of the spectrum of schools. The specific question in the NBER paper stirred fond memories of Dr. Elizabeth Bogan at Princeton, now a senior lecturer there and probably still inspiring young students the same way she did back in the early 1990s. Adjunct faculty at outstanding institutions are outstanding; not a surprising result!

China eases one child policy

The Times reports that the change appears to be formal implementation of a plan allowing single children to have two children themselves. Not exactly a sea change in policy, but an interesting intergenerational compensation setup.

Robbing Peter to get out of a recession

Jens Weidmann admits that monetary policy hurts savers during recessions, an often understated fact. The belief is that the cost is worth the gain!

A sea of recession graphics

Thanks to Paul Krugman's column today, here's a link to a paper by three economists at the Fed presented at an annual IMF conference with unbelievable graphics showing the hit to potential GDP and employment caused by the great recession and its aftermath. The output gap in Figure 1.2 at the end is estimated to be about 4% (± 2% in the 95% confidence interval) currently.

Starbucks pledges veteran employment

Today Starbucks announced a new plan to hire 10,000 veterans and active duty military spouses. Former defense secretary Robert Gates is quoted as identifying the challenge of matching skills of veterans in the labor force with corporate needs, and this appears to be a promising step by a leading U.S. employer.

Rand Paul and plagiarism

New allegations of plagiarism by Rand Paul or his staff are sad and troubling. This kind of behavior is not acceptable, and it's a very sad commentary on the failings in higher education to educate how and why. How pathetic is it that one of Paul's quotes is that he's now going to do it "like college" and footnote things. And why in the world does anyone view that as optional? Shameful, for Rand Paul and for higher education for not educating.


Update: Here's a longer article in the Washington Post that includes some Joe Biden context. Even more shameful, back from when I was about 15 and less aware of this.

SSB taxes in Mexico

Today's Times op-ed from abroad features a wry assault on taxes on sugar-sweetened beverages in Mexico by novelist David Toscana. My favorite line: "Yes, we know we should disinfect water, filter and boil it, but it is easier to buy it in a bottle — maybe with some carbonation and sugar."

"Italy: The Nation That Crushes Its Young"

Nothing like a snappy op-ed title! Italian columnist Beppe Severgnini covers a lot of ground in a 10/30 op-ed in the NY Times, which is at least dually focused on the costs of old-age support (pensions) and young unemployment and out-migration faced by modern Italy. He also cites Haiti and Zimbabwe as being the only two economies that had grown less rapidly than Italy's between 2001 and 2011.

The weirdest part to me was how at the end he seems to be calling for older workers to retire, presumably in order to open up job vacancies for younger workers to fill, while at the beginning he motivated the concerns by citing how "old-age pensions swallow 14 percent of country’s gross domestic product and 57 percent of all social spending." Surely a concern, but it would not be helped by more retirement.

I was surprised by his growth statistics, but it looks like his point is basically right, if perhaps oversold. The Penn World Table v.8 places Cote d'Ivoire, the Bahamas, Zimbabwe, Barbados, and Guinea below Italy, which averaged 0.2% annual growth between 2001 and 2011.  (Haiti didn't make the cut presumably because of data quality or availability issues.)  But the very next country is Japan, at 0.3%, and 13th lowest out of the 167 countries in the database was the United Kingdom, at 0.9%. The U.S. was 23rd on the list at 1.4%.

Shiller's eyes on the prize

Yesterday co-Nobelist Robert Shiller writes in the Times about interpreting efficient-markets theory, and to me it read like more backhand than compliment to fellow Nobelist Eugene Fama, who admittedly said some rather interesting things about the financial crisis in his 2010 New Yorker interview.

Drug costs and the value of a life year

How much is life extension worth? This week's New York Magazine includes an article on new cancer drugs whose gist is pugnaciously summarized on its cover as investigating "The Cancer Drug Racket." Inside, the clever title of the story is "The Cost of Living," and on the first page, the author reports a back-of-the-envelope scaling up of a new cancer drug's cost to $303,000 per year of life saved (not including the services required to administer the drug). Although this is a large number, I didn't find it that unreasonably large relative to estimates derived from the willingness to pay to avoid mortality risks.

Surely the big issue is who pays this or not, and how do they choose? Another great quote is had later in the article with this gem:  To a health-care-policy analyst like Peter Bach, it is the story of a market so jerry-rigged with regulations that, as a graduate-school professor once told him, “the beautiful thing about health care is that it has every market failure you’ve ever heard of—plus two or three more.”

Another quirk and birth timing

A recent NBER working paper revisits the question of whether parents shift births from January into December for tax purposes, and today the Well Blog reports about deductibles resetting between calendar years and higher out-of-pocket costs for childbearing across the new year. It would be nice not to have any calendar-related changes in the price of childbearing, wouldn't it?

China's repaying of the demographic dividend

Today the Wall St. Journal relays a report by Citigroup analysts claiming that population aging brought on by the one child policy in China could reduce annual growth by 3.25 percentage points between now and 2030. I haven't had time to verify this, but that seems like an enormous effect. But then again, fertility in China has indeed fallen a lot, from a TFR of 2.5 births per woman in 1990 to 1.7 in 2011 according to the World Bank's WDI database.

Interview with Robert Shiller

Over the weekend, the Times published this fun interview with Robert Shiller, co-winner of the 2013 Prize in economic sciences. Great quote about co-winner Eugene Fama at the end, and the philosophy of scientific disagreement.

Chetty on economics as a science

Today Harvard's Raj Chetty defends economics as a science in the NYT with specific references to modern study design and data-driven findings. The parallel he draws to population health sciences is a good one; in neither case do we have full rein to conduct randomized controlled experiments to figure out how things work. I'm not sure Janet Yellen or Nobel Laureate Paul Krugman would fully agree with Chetty that they are "theorists," which sounds as though their work is uninformed by data, but maybe his point is that things like monetary policy are a lot more like something you can't run clear tests with than topics like unemployment insurance duration or health insurance.

Contrast Chetty's summary of the literature comparing states that expanded UI duration with those that didn't, which he describes as showing what sounds like a small 1-week increase in average unemployment duration for every 10-week increase in UI limits, with Casey Mulligan's recent work on marginal tax rates. Mulligan doesn't connect his marginal tax rate series to employment effects, but the CBO uses a Frisch elasticity of 0.4 as its central value. An increase in the marginal tax rate of around 4 percentage points, which is what Mulligan finds during the Recovery Act and then again under the Affordable Care Act, might then produce a reduction in hours by about 1.6 percent, which seems large.

Statistical releases post-shutdown

I was wondering about when we'd see the September unemployment report, and the answer is next Tuesday. Blinders ... being removed!

"Generational Theft"

Well, that's a strong way of putting it, but maybe sometimes it pays to be flashy. Today in the NYT, Tom Friedman discusses his friend Stanley Druckenmiller and his recent rather strongly entitled presentation at NYU about U.S. entitlement spending and intergenerational transfers. It's good to see a blunt discussion of this, especially with the added focus on poverty among the young compared to that among the elderly, although that focus is not new. Sam Preston pointed it out in the early 1980s.

Child behavior, bedtimes, and study design

The NY Times reports on a Pediatrics article on regular bedtimes and child behavior. As you might expect, parents' self-reports of regular bedtimes is associated with better children's behavioral scores, but who knows whether it's having a regular bedtime that causes better scores, or better behavior causing the scores and the regular bedtime. Not revealed in the Times article is that the study looks at differences-in-differences or changes in these variables over time in the panel, which will remove any unchanging sources of variation. But without a clearer source of identifying variation, it's hard to accept such results reveal a causal lever.

Now there's a return on an asset

Today the Nobel Committee awarded the 2013 prize in economics to Eugene Fama, Lars Peter Hansen, and Robert Shiller, for theories of asset pricing and the generalized method of moments (GMM) estimator, which has become a standard element of the econometrics toolkit. I remember when I arrived at UC Berkeley in the late 1990s, Roger Craine, now emeritus, was interested in the finance side of macroeconomics and introduced some of these topics to our Ph.D. cohort.  Some of it made its way into my dissertation.

More recent memories are of the New Yorker's John Cassidy interviewing Eugene Fama for a piece entitled "After the Blowup" that appeared in early 2010.

Update: Over at the WSJ, Michael Casey quotes from Cassidy's piece on the topic of credit bubbles and feels Shiller's "Animal Spirits" approach seems to better capture at least recent events. In the interview, Fama explains what he means about bubbles, that in a way the term only applies in hindsight.

Here's a fun graph of Major League Baseball team victories (vertical axis) plotted as a function of opening day payrolls (horizontal). I was surprised to find an upward sloping relationship with as much statistical significance as there is, although here not enough to pass the standard test of a 95% confidence bound. There are plenty of reasons to quibble with this graph, not least of which being that opening day payrolls change a lot as the season play out, but I thought it was fun. No wonder the Yankees would like to get under the luxury tax threshold!

Janet Yellen to be nominated for Fed chair

Here's a fun timeline of Janet Yellen's life and career in the New York Times today. The high school yearbook photo is fun! I was fortunate enough to work at the CEA in 1998 and 1999 when she headed it, which is about a third of the way down the page. But I think by the time I got there, President Clinton had white hair!

Wilentz on the 14th Amendment

The eminent Sean Wilentz of Princeton wrote an op-ed in defense of presidential power to pay U.S. debts under the 14th Amendment. It's hard to quibble with his interpretation of historical events and the intent of Section 4 about the "validity" of the public debt. But his description of the 1860s controversy over paying debts in "depreciated paper money, or 'greenbacks'" was striking in light of the history of financial crises and defaults recently popularized by Reinhart and Rogoff. I think they would say that the U.S. has indeed "defaulted" on debts by repaying in inflation-debased currency, probably most notably by going off the gold standard during the Great Depression. One would have to agree that simply not paying debts is a lot more like unconstitutionally "questioning" them than inflating them away, but it seems there is some leeway in interpretation.

Two NYT pieces on immigration

Today one article covers Turkish and other immigrant groups in Dayton, OH, that community's efforts to attract immigrants in order to restore economic vitality, and some of the controversies. Also today, an editorial recounts California Gov. Jerry Brown's signing a bill to grant driver licenses to undocumented immigrants and describes it as a grassroots fix to challenges posed by immigration.

It certainly is striking how, as the editorial points out, the California Republican Party (i.e., consisting of the state office holders) appears either to have no Tea Party contingent or one that is differently focused than the national group. Left unsaid here is how another arguably grassroots immigration reform in neighboring Arizona led to a very different kind of legislation there, one that was partially struck down by the Supreme Court.

Mulligan on trends in implicit tax rates

Here's an op-ed by Casey Mulligan in the Wall St. Journal with a startling graphic (thank to Greg Mankiw's blog for the cite). It also appears as Figure 2 in Mulligan's recent NBER working paper. It shows increases of about 8 percentage points in the marginal tax rate on earnings by median earners associated with the Recovery and Reinvestment Act policies, and increases of about 4.5 percentage points associated with the Affordable Care Act, around a base rate of 40% before the recession.

It would appear the marginal tax rate is strongly affected by unemployment insurance.

(geo)Graphical look at the uninsured in America

Today the NY Times reports about Americans without health insurance, and they've provided a very helpful set of graphics showing where they live and who they are, which is here. The failure to convince states with large poor populations to acquiesce to the Medicaid expansion in Obamacare looms large.

New book on NFL and concussions

ESPN's Outside the Lines reports on a new book relaying the sad history of brain trauma studies and the NFL and mentions stuff that sounds like pretty clear conflicts of interest in publishing, along with some patterns of complete denial by league officials, in 20/20 hindsight. Notable also was a brief recounting of a meeting attended by NFL officials and a representative from the Defense and Veterans Brain Injury Center.

The book, League of Denial, appears to be associated (or is the same as) the PBS Frontline project that originally was a collaboration with ESPN.

WSJ on how Obamacare affects people

Here's a helpful article from the Wall St. Journal on how tomorrow's rollout of Obamacare's insurance exchanges and other aspects will affect people. I admit I was dazzled when I tried picking through the White House's website for details. Frankly, the Wikipedia page was more clear, and there's also a PDF from July 2012 from the Kaiser Family Foundation that explains things in plain language.

I think a big surprise is going to be felt in 2018, when "Cadillac" plans with high premiums begin to be taxed.

Sachs on poverty and public/private

Jeffrey Sachs argues global poverty is in decline, as measured by shares with less than $1.25 per day, and he highlights contributions by private and public sectors to achieve growth. In particular, he writes about cellphones and malaria eradication as using both types of inputs.

Lomborg on climate change and variability

Bjørn Lomborg, author of The Skeptical Environmentalist (the book has its own Wikipedia page!), provided a very nice op-ed recently in the Washingon Post that debunks the often-heard claim that global warming is associated with increased weather volatility. In his recounting, higher average temperatures have occurred alongside no clear trend in the variability of temperatures. And in some cases, the outcomes triggered by weather extremes, deaths due to cold snaps or heat waves for example, may have actually been dampened by the increase in average temperatures.

I know part of my own perception of this has stemmed from discussions about hurricane intensity and (average) temperature, such as on this NOVA page. And Tom Friedman's use of "global weirding," which sounds like it's referring to variance but might not be after a closer look.

Geographer on carrying capacity

Today in the New York Times there is a fun op-ed about the earth's carrying capacity of humans, which references the great Danish economist Esther Boserup (1910-1999) and her revisiting of Malthusian population theory.

Why doctors probably hate economists

I enjoyed reading this NY Times blog review of Emily Oster's new book about questioning the received wisdom from doctors about best practices during pregnancy.  It isn't too surprising that the advice runs conservative, to put it mildly, given how doctors can be sued for malpractice.

Krugman on theory

Here's a nice blog post by Paul Krugman about the death of theory, presumably in cutting edge Ph.D. dissertations and research. He writes how in trade and macro, his sense was that either theory could prove everything or nothing, respectively. My own two cents is that the unprecedented availability of new micro datasets and powerful personal computers to analyze them made empirical economics far more relatively salient.

Mankiw on gold investing

Greg Mankiw gives us a great primer in the NYT about investing in gold that is full of new insights. Probably every economics professor gets asked about this at some point, and here's a great treatment.

History of families and a Crown Heights building

Here's a fun article about the impending sale of a house in Crown Heights that was built in 1888. The author recounts some interesting details about previous occupants that go beyond what one could find in census records, but the exercise could be broadly repeated using publicly available data from censuses in 1940 and earlier.

Inequality measures

A recent NYT blog article discusses recent work by Richard Burkhauser and coauthors on measuring trends in inequality in income net of taxes, transfers, health insurance, capital gains, and kitchen sinks. What a job that must be, I'm glad I haven't waded into that pool! The blog article contains some great quotes from leading economists in the field, and for me the biggest issue is raised by Gary Burtless: to figure out what happens to assets, Burkhauser et al. assume everyone gets the same market returns, and we know that's not true. It's hard to draw any definite conclusions before peer review hopefully exposes any kinks in methodology or lays concerns to rest.

We want to know what's happening to income inequality now, year-to-year, but my two cents is that "completed" or "cohort" inequality, what people have ended up with over their lifetimes after all the dust settles, is the outcome we're more concerned with, and not so much the year-to-year fluctuations unless those appreciably affect long-run outcomes.  Do we know whether they do?  Ah, the challenges of social science when, for very good reasons, it's very difficult to observe every vicissitude for an individual over many periods.

Inflation ups and downs

Like most Americans, the only price I've been keeping track of this summer is of a gallon of gas. But a recent headline led me to an Atlantic article last month with some nifty graphs showing the dip in core PCE inflation. I remember the first worrying dip in fall 2010 because I mentioned it to undergrads. Crazy. I wonder if inflation expectations show a similar set of dips; the article seems to suggest they don't reflect the recent dip.

Civil War soldiers

David Brooks provides another thoughtful column today, on the perspectives of Civil War soldiers toward their role in the conflict, as we approach the 150th anniversary of the Battle of Gettysburg. He cites James McPherson and others who report patterns of civic mindedness in letters written by soldiers, and he contrasts them with the post-WWI "Hemingway" version of war perspectives that is considerably less rosy.

Two thoughts occurred to me. I wondered whether the written record during the Civil War was much representative of enlisted men as opposed to officers, during a period when literacy was not widespread. But it is also plausible that a fight to preserve the unity of the country, as opposed to the foreign wars fought since then, which have arguably never been existential, might well be perceived very differently by those involved.

Coffee houses and social media

As a follow-on to a post I made a few years ago about essays on caffeine, here's a fun related piece in the NYT about coffee houses as the social media of the 1600s. Samuel Pepys, stop wasting so much time on Facebook? And there's the ubiquitous reference to the use of social media in the classroom, something I wish I could get started with my students but so far haven't found the right way to do it.

WSJ on Janet Yellen

I enjoyed reading this WSJ article today about Janet Yellen, "Janet Yellen, a Top Contender at the Fed, Faces Test Over Easy Money," which is behind a subscriber firewall. Thanks to my dad for sending it along!

I had the privilege of serving as Janet's assistant on two trips to the OECD in Paris back during 1998 and 1999, when unemployment in the U.S. was dipping down toward 4.0 percent.  Those trips were a great education for me, a 25-year old Ph.D. student from Berkeley who was more than a little wet behind the ears.  Janet's preparedness, knowledge, and steady wisdom were inspiring.

Educated Chinese workers unemployed by choice

The Times reports on voluntary unemployment among two young Chinese workers (who happen to be dating) each with advanced education, who prefer to wait rather than take a factory job. Both report family support, which on the one hand is more strained than it would be in the U.S. because of more severe generational disparities in education, and on the other hand is less strained because of the one child policy.

Inside the late 2007 FOMC meetings

The New York Times published an article summarizing the FOMC meeting transcripts from fall 2007 that were recently released after the standard 5-year delay. Most notable to me were remarks attributed to Bernanke in the September meeting in which he argues for leaving the federal funds rate unchanged so as to avoid any appearance of a bailout of financial market participants.

Stiglitz on macro effects of inequality

Today Joe Stiglitz blogs about some costs of inequality and in particular why he feels it is responsible for the slow recovery. For me the notable statistic was that growth in the pre-crisis decade "was reliant" on the bottom 80 percent of households spending 110% of their incomes. Nothing like giving one hundred and ten percent.

SJSU and cyber-remediation

The Times published an article about Udacity and San Jose State University partnering to offer introductory and remedial classes online. If remediation can be more effectively achieved through cyber-learning, that seems like a development that is close to fully Pareto optimal, helping everyone and harming nobody.