Monday, December 29, 2008

The best coverage of the crisis in East Europe

is from Edward Hugh at at Fistful of Euros.
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Where money is cheaper than TP

One more toilet post. In Zimbabwe, money is cheaper than toilet paper (but probably is not as soft).
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Thursday, December 25, 2008

Beirut parking

Click picture to enlarge. Thanks to Nada.

Letture natalizie

Le Mie Cose di Marco Lazzarotto, molto divertente. Grazie a Luca M. per la segnalazione.
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Saturday, December 20, 2008

Who will listen to them now?

So, you have an institution that, among other things, provides advice on macroeconomic managment. A little more than one year ago this institution implemented an expnisve and controversial downsizing program because things in the world economy were going well. And now, this.
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Friday, December 19, 2008

Mosquee-ou-salle-de-presse?

Click to enlarge (thanks to SiL Nadine)

Does economics need a scientific revolution?

This article says yes: Most of all, there is a crucial need to change the mindset of those working in economics.... They need to move away from what Richard Feynman called Cargo Cult Science: a science that follows all the apparent precepts and forms of scientific investigation, while still missing something essential.... Economic curriculums need to include more natural science.
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Thursday, December 18, 2008

Misunderstood people

Tyrone on Madoff: What about that guy who set up the phony investment company? Can the Treasury make a new one of those, only bigger? He took money away from people and gave it to charities and the needy and the arts and higher education. That sounds like stimulus so why are we sending him to jail? Wasn't he ahead of the curve?
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Charity porn

Performers of the Japanese porn company Natural High's new Naked Continent series have sex with impoverished local Africans on film. The director gave about $11,000 to a Kenyan charity, distributed some corn and free T-shirts to the locals in the area and then gathered up a few local men to have sex on tape with their performers. For every DVD they sell, the company plans to give another $10 to the same charity. The whole sad story is here. I found it here.
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Post crisis corporate logos

Here, thanks to raja.
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A praise of shoe-throwing

Here , and here is the video. More here
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Exotic license plates and income distribution

I had never seen a Vanuatu license plate. So, when I saw this car in the UN parking in Geneva I had to take a picture (click on the picture to enlarge).
If you want some populist numbers, this S class Mercedes (who is likely to belong to a diplomat from Vanuatu) is worth about $100,000. The total GDP of Vanuatu is $310 million, divided by a population of 240,000, you get a GDP per capita (not PPP adjusted, but you don't buy the Mercedes using PPP dollars) of about $1300.

Assume that the owner of the car is indeed a diplomat and that he/she spent 50% of his/her annual income to buy the car. Also assume that Vanuatu has 50 diplomats of the same level of the owner of the car. You get that these 50 diplomats collect wages equal to 3% of the country's GDP and 13% of total government expenditure!

If you want to know more about long series of assumptions that lead to resonable guesses, check out the meaning of Fermi Problem (yah yah yah, the name of my high school was Enrico Fermi)
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Tuesday, December 16, 2008

Ph.D. Comics

A Graduate student comic strip: Here. thanks to SiL Nadine
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The crisis is increasing US financial power.

How should this new power be used? Here is Ricardo Hausmann.
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Monday, December 15, 2008

Our SOB

Here
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Found on Terence Tao's page

Mostly for math but applies to many other fields. Career advice, On writing, Most common errors in undergrad math, The cult of genius (for Feynman lovers), On hard work, On time management, Ten lessons I wish I had been taught, The Princeton companion to mathematics, Duties as scientist, Advice for the young scientist. For graduate students (1 ,2, 3 three, on negotiating, is the most important)
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How to raise and talk to smart kids

Here, here (this is highly recommended, it will challenge your ideas on the role of self-esteem), and here. (Another article on the dangers of too much praise is here.)

I've not finished reading everything, but it seems that the secret is never telling them that they are achieving a lot because they are very smart. Instead, one should tell them that they are achieving a lot because they work hard.

I've always criticized my father for being stingy with compliments (the biggest compliment I've ever heard from him is: "that was OK") . Should I tell him that he was right all along? Woulnd't this be too much praise for him?
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Math puzzles

Greg Mankiw points us to this nice math puzzle from Terence Tao. My favorite answer is that of Harald Hance Olsen.  
Down in the comments somebody pointed out than Steven Landsburg had asked the same question from an economic perspective (here). Check out the mathematician's reaction to Landsburg's article: It made me feel infinitely superior to the economists, as I could spot the problem with the benefit side of the equation the moment it was stated. (Insert your own economist joke here.).  
He's right, the only thing we are left with is higher average pay :)

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Sunday, December 14, 2008

Hariri's assasination

The Atlantic has a very interesting story on the investigation. The slide-show is also recommended. Especially the picture of May Chidiac. Thanks to Paulita for sending it.
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Good cartoons

Here. Thanks to Nada C.
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Buiter on Steinbrueck

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Saturday, December 13, 2008

The ski season is officially open


Legs are bad, but today the snow was amazing and Tito's old pocket rockets (one of the best presents ever, thanks Tito!) really enjoyed the powder (see pic).

Thursday, December 11, 2008

Bad news on all fronts

  • Investors shunned one of the most liquid and safest assets in the world yesterday as a German bond auction came close to failing in a warning sign for governments attempting to raise record amounts of debt to boost their slowing economies. here
  • Harvard, the wealthiest university in the world, .. [it] would also postpone nearly all searches for tenure-track professors. here
  • The world economy is in a terrifying nosedive, visible everywhere. Yet Mr. Steinbrueck is standing firm against any extraordinary fiscal measures, and denounces Gordon Brown for his “crass Keynesianism.” here

The costs of default

My work with Eduardo Borensztein on the costs of sovereign default (also here and here) has generated some interest in the blogsphere (here and here). However, I am afraid that some readers are misinterpreting our finding of the presence of a limited cost of default. Traditional economic models base on the seminal paper of Eaton and Gersovitz assume the presence of strategic defaults (i.e., countries default when they could easily pay). We argue that countries don't default strategically but default in the middle of deep crises when paying the debt would imply huge economic and social costs. It is in the presence of such non-strategic (or justifiable) defaults that we observe limited costs of default. We don't know what would happen in the presence of a strategic default. Our conjecture is that the cost of such a strategic default could be huge, and this is why we don't observe strategic defaults (note that our understanding of the literature may soon change as there is now a country which might be on the verge of a strategic default).

A new super cool paper on everything you want to know on sovereign debt and sovereign default will soon be coming. I will post it when it's ready.
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Chris Blatmman has the best graphs

Cotton 150 years ago and voting today. Check out this strange maps website.
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Escher architecture

Here
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Parmigiano-bailout-related posts from Italian economists

Here and here.
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Invisible hand

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Wednesday, December 10, 2008

Two nice posts from Greg Mankiw

Parmigiano bailout (this affects me negatively both as an Italian taxpayer and Parmigiano consumer)
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Stink and perfume!

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An ad for the Big 3 bailout

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Tuesday, December 9, 2008

Links

The year of exceptionally low returns
New Economics Blogs Woodward and Hall and Andy Harless. Both found here
Krugman's Nobel lecture: here and here and misreporting
Double whammy. This is really bad news. Those who need them don't use the drug and those who smoke them get high and get infected!
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Probably the best website, ever

Any music video, any time! Here
Addendum:
OK, Raja is right, No Sex Pistols either. MTV, for the moment you still suck
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It's all Disney's fault

If you ask my 3-year old daughter to describe herself she will answer with one of the following 4 words: principessa, princess, amira, princesse (the answer will only depend on the language in which the question was asked). Until yesterday, I thought that it was our fault and that we should stop spoiling her and treating her like royalty, but after reading this, I realized that it is all Disney's fault.

But it gets worse. This piece suggests that Disney's redesign of the eyes and mouths of its female characters could be linked a recent increase in teen pregnancy (what was Sarah Palin's daughter watching?).

Maybe, I should only let her watch Disney's evil characters. Check this out.
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Saturday, December 6, 2008

The crisis in one chart

From Jeff Frankel
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Job market horror story

Chris Blattman tells one and asks for more. I posted my own which is: The department head invited me to dinner to his house after the talk, his wife got drunk and hit on me.
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Friday, December 5, 2008

Keynesian arithmetic

Unpleasant, indeed.
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Thursday, December 4, 2008

Weird & Interesting

Floating tits.
Somali pirates buy Citi
Real pirates
Krugman's verdict and what he was really thinking when he met Bush

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We

Big endowment big losses

Read this: The Harvard endowment, the biggest of any university, stood at $36.9 billion as of June 30, meaning the loss amounts to about $8 billion.
8 billion is about half the GDP of Lebanon.
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Scientology

Here.
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Bagels

I laways thought that they suck, but da wife and my friends love them (I think that Luca is the the only one who agrees with me). So, here it goes.
Friends in DC, check this out: there's a great, relatively new bagelry in Rockville, called Goldberg's. Their bagels are the only bagels I've ever had in the D.C. area that are worthy of the name.
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Tuesday, December 2, 2008

End of the World?

In Geneva, we have been waiting for the end of the World since September (here and here). Angel just sent me this nice book review. The key sentence is: How many times does the end of the world as we know it need to arrive before we realise that it’s not the end of the world as we know it?
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Wednesday, November 26, 2008

Books

I tend to be a compulsive reader (and book buyer, da wife gets very scared when she sees me surfing amazon.com), but recently I've been busy and I haven't been reading much. However, I just finished White Tiger and I loved it (the book also mentions the New Delhi market where I bought the book! By the way, buying books in India is fantastic).
In the meantime, the world entered in full Bolanomania. I haven't read 2666 (but Tyler Cowen recommends this book review which ends with: BolaƱo has joined the immortals.). However, I did read The Savage Detectives (no detectives in the book) and I have mixed feelings about it. I loved some parts of the book and found other parts very boring, and, yet, I have the feeling that the good parts wouldn't be so good without the boring parts. I also often think about the book (and I read it almost two years ago), so it must be a good book.
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Monday, November 24, 2008

Barclays Capital on Ecuador's default

Barclays Capital Research has an excellent piece on potential contagion from Ecuador's default. One of the authors is my friend and co-author Eduardo Levy Yeyati (in fact, the piece is partly based on our past research). Unfortunatley, the piece is not available on the net.
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The new US Treasury Secretary

The New Republic has a very nice profile (the story was written before the appointment). Free Exchange (the blog of The Economist) speculates on who will replace Geithner at the NY Fed.
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SING TO THE TUNE OF 'BOHEMIAN RHAPSODY' BY QUEEN

Is this the real price?
Is this just fantasy?
Financial landslide
No escape from reality

Open your eyes
And look at your buys and see.
I'm now a poor boy (poor boy)
High-yielding casualty
Because I bought it high, watched it blow
Rating high, value low
Any way the Fed goes
Doesn't really matter to me, to me

The whole text is here.
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Sunday, November 23, 2008

Rose

Kids who love "rose" (pink) even more than my daughter.
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LACEA, lot's of good stuff but also some bad news

I am on my way back from LACEA. I had no time to enjoy Rio but I saw lots friends (and I was surprised to find out that many regularly read No Original Content) and the conference was really good. Great papers with high policy content, so far away from standard ivory tower stuff.

Because of my commitments with the Economia panel I lost many interesting sessions, but I did manage to listen to Abhijit Banerjee’s fantastic interpretation of India’s economic success (with a discussion of how, in his view, India and China are screwing all other countries at the same stage of the development process) and Ricardo Hausmann’s discussion of internal decoupling in Latin America (Ricardo could be asked to give talk about the standard deviation of the temperature inside his refrigerator and still manage to make it fascinating).

Of course, the fact that there were so many good papers is not so surprising. Given the policy-obsession of Latin American economists, LACEA is always a good conference. The most surprising thing was a very bad plenary (or semi-plenary) presentation. Probably the worse since I have been going to LACEA. I hope that my friends will not suffer too much.
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Saturday, November 22, 2008

Friends with nice houses

The Wall Street Journal has an article about the house of my friend, coauthor, and former colleague Ernesto Stein.
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Thursday, November 20, 2008

Luca Ricci on Business Week

Luca, who also used to be a rollerblader, tells Business Week about the employment effects of the crisis.
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A cloudy day in Ipanema



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Tuesday, November 18, 2008

Off to LACEA

The conference is very good (the program is here), the journal is excellent (check out the editorial board) and the place, well, uh uh, how do you describe Rio? You can listen to this (in English with Stan Getz here) or read Tyler Cowen who concludes: "Might Brazil be the best place, period? " (the only problem is that the weather seems to be crappy right now)
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Funny...

Click on the pipcture to enalarge. Thanks to Raja.

Monday, November 17, 2008

Two types of liquidity

Lasse Heje Pedersen explains. See also this nice column by Carmen and Vincent Reinhart on the cost and responsibilities that come with exorbitant privileges.
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Evil, stupid, or both

A friend who lives in a major emerging market country sent me an email describing the policymaking process in his country. It goes like this: Peter Seller's Inspector Clouseau illustrates how sometimes sheer stupidity is more dangerous than evil. Our current stance is that, unlike Clouseau, the government is evil, but in a very stupid way.
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Italian mothers in law and the Middle East

Da Wife sent me this article on a divorce caused by a terrible Italian mother in law (I think she's getting along well with her own Italian mother in law, so I don't think this was a subtle hint to anything).

In the meantime, I received another book recommendation from SiL Nadine. The book is titled Sharon and My Mother-in-Law. This made me think that Middle Eastern policy could have been different if we had exported some terrible Italian mothers in law to Palestine!
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Ecuador on the brink of default

So, are we again living in the age of defaults? Here is Bloomberg news: Ecuador, hamstrung by a tumble in oil, its biggest export, said last week it will use a 30-day grace period to decide whether to make a $30 million interest payment that came due Nov. 15....The price on Ecuador's 12 percent bonds maturing in 2012 plunged to 14 cents on the dollar on Nov. 14, sending yields over 100 percent, as investors braced for the first sovereign default since the global financial crisis deepened in September.
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Sunday, November 16, 2008

The coolest on-line art gallery

Here. What about non-online? Of course the one managed by Pepi, but I will never be able to afford anything there.
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Saturday, November 15, 2008

The only thing that scares Vladimir Putin

Becoming like George Bush
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...told you so

Micco-Panizza (2006) (but written around 2003) “This paper provides evidence for the fact that state-owned banks may play a credit smoothing role. …This suggests that state-owned banks could play a useful role in the transmission of monetary policy”

Oxford Analytica (2008) “Governments in several nations have also aggressively used public sector banks to provide credit and other types of financing to sectors that are particularly vulnerable to the crisis or those that are important for economic growth” Thanks to Arturo Galindo for sending the article.

… and they insulted us when we wrote our series of public bank papers. I don’t know what my noise-to-signal ratio is, but I think that my forecasting ability is improving and I'm still hoping for a crash in the Geneva-region housing market.
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Thursday, November 13, 2008

Torture

Read the post, watch the documentary, get depressed but hope that this will soon be over. You can also read Brad deLong's torture memo.
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Evil UN Staff

Pierre-Louis at Rigotnomics does not like us (see here and here). I think that he is completely right in pointing out serious staffing and inefficiency issues at the UN, but his proposed solution (cutting pay) doesn't make any sense.

First of all, we need to find out whether the UN pays too much. This is not an easy task. If we compare UN pay and benefits to those of other international organizations, we find that the UN pays less than, say, the Fund or the Bank (see here for evidence). Of course, this is not a fair comparison, because the quality of the staff might be different. I have only one observation for which I can compare pay, holding constant staff quality: myself. I can assure you, that I make much less money (PPP adjusted) and I have worse benefits in Geneva than in Washington (why did I move? Money isn't everything). So, I feel pretty confident in saying that the UN does not pay too much compared to similar employers. Of course, you can argue that all these employers (the Bank, the Fund, the BIS,…) pay too much and I would probably agree with you (some evidence is provided by the fact that people rarely leave these organizations). However, the fact that the Bank/Fund/BIS pay higher salaries, offer more generous benefits and stronger job security and, yet, have less serious staffing problems is prima facie evidence that high salaries are not the source of the problem.

Of course, one could lower salaries until people start leaving and this would reduce the UN personnel cost but I don't think that such a policy would increase the quality of the staff (it would probably lower it because the first people toleave are usually those who have outside options, see what happened at the Fund last summer).

The parallel with blood donors is also misleading. To be a good blood donor you need to have "clean" blood. Given that donors have private information on the "quality" of their blood, not paying for blood donation allows you to sort people with "good" and "bad" blood. To be a good employee, you don't only need to be idealistic (like for blood donors), but you also need to be intelligent and well-prepared. Staff members of NGOs are often idealistic and well-prepared, but I've seen many NGO idealists who are also complete idiots.

Summing up, we do have a serious personnel problem (please also note that I also have many colleagues who are incredibly hard working and committed, you often find them in their offices late at night and during weekends) but, in my view, cutting salaries is not the right solution (of course, I have a vested interest here).

Let me conclude with one observation about quality of research. In this post, Pierre Louis hints that the quality of UN researchers is lower than that of WTO researchers. Evaluating research quality is very difficult. But, for whatever rankings are worth, this ranking of the top 50 Swiss-based economists only includes 4 researchers who are based in international organizations: 3 are from BIS (ranked nr 4, 10, and 31) and one is from UNCTAD (ranked nr 26). Note that BIS pays much much much much better than the UN.
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Wednesday, November 12, 2008

Today I will be talking about institutions

These are some important points I need to mention.
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How to solve the time-inconsistency problem

Here. Thanks to Manu-Manu
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Tuesday, November 11, 2008

The next book I will read

The Secret Life of Syrian Lingerie: Intimacy and Design. Thanks to SiL Nadine. Here is more: Who wears a g-string with a fake miniature bird that lights up
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The economic team

Willem Buiter is not so excited about Obama's economic team. This is what he has to say: They’re old (the mean age is 61.9); Too few serious economists and far too many lawyers (he adds: the American political system is completely dominated by this largely socially unproductive and parasitic profession. I add, he should look at Italy!) They are protectionist; They are the unalluring faces of past failures!

Buiter concludes: the one beacon of hope in this fog of mediocrity is Paul Volcker, a truly great man with more character, intelligence and vision than the rest of the Board put together. (ndr: he is also the one who really increases the average age).

Addendum
Comment by Willem Buiter below (cool that he took the time to read something I wrote). Of course he's right. Also the median is high.
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Monday, November 10, 2008

Monetary sado-masochism

Since 1999 the FED moved the policy rate 45 times, the ECB 25 times. And yet, given the fact that the European labor market is much more rigid, it would make sense for the ECB to be more activist than the FED (I, sort of, show it in this paper). Moreover, in these tough times prudence can be counterproductive. A 1996 AER paper byCaplin and Leahy makes the point very well: Modest stimuli may prove ineffectual. If small reductions in interest rates are unlikely to promote a response, then they may be followed by further cuts. A vicious circle develops in which the expectation that the policy could fail leads investors to delay investment, thereby promoting failure.
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Sunday, November 9, 2008

But they still haven't found

what they are looking for.
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Amazing!


The Taj, not me (click picture to enlarge)









Thursday, November 6, 2008

Blow horn

All indian trucks seem to want you to "blow horn". I have no clue why.

Wednesday, November 5, 2008

Criticizing Alan Greenspan

While writing this post I realized that, these days, criticizing Alan Greenspan is a little bit like shooting at the Red Cross. However, when he was strong, powerful, and considered infallible, almost nobody dared saying anything bad about the Maestro. I say almost because, as usual, Paul Krugman was well ahead of the curve. Two early columns in 2001 ("Et tu, Alan" and "Doing the wrong thing) are not available on-line, but here you can find summaries. More recent columns are 2004, 2004, and 2005.
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Tuesday, November 4, 2008

Toilets

I am still in Vienna and just found out what that Austrian toilets are different. Here is Robert Waldman on the subject. Of course, only China has star-rated toilets.
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Airports

I’m sitting in Vienna’s airport on my way to New Delhi and I just realized that this was the only main European airport I had never visited. It’s nice, but what is the nicest main European airport? Well, surely not Paris. Charles de Gaulle is awful (this is sad because I really like Air France). While Munich is nice and very convenient, my vote goes to Amsterdam. Of course Schiphol is not as cool as Changi (which is the best airport in the world) but it’s very nice, it has a small Casino (not that I gamble), a small museum and, if you have a half day layover, you can visit Amsterdam and find whatever type of entertainment you might be looking for (of course, I mean this).

By the way, did you ever wonder why German airports have sex shops? What do people buy? Something to keep them busy during long flights? Next time I am in Munich or Frankfurt I’ll go in and ask.

What about airport names? Orange county picked the coolest airport name. Washington National and Houston, Texas picked the worst names. I took the Washington-Houston flight many times on my way to Mexico and flying from Reagan into Bush always looked like a nightmare (the only consolation is that the Houston Airport is named after Bush father). Of course, one could do worse. Imagine if one day the Rome-Milan flight will take you from the Giulio Andreotti to the Silvio Berlusconi Airport!
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More on the Bradley effect

If this analysis is correct, tomorrow night will be a long night. And don't forget Osama.
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Shiller on bubbles

..and why it's hard to talk about them. In fact, I still think that the Geneva housing market is in the middle of a huge bubble, but nobody believes me.
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Cool idea about the Fund

Here is Eswar Prasad: The second idea is to impose conditions on voting rights, rather than just on loans. Each country would get a list of criteria (e.g., a lower budget deficit, a more flexible exchange rate) that it would have to fulfil or have a plan for making progress towards. The IMF already jawbones its member countries, but only countries that borrow from it take its recommendations seriously....Conditionality on voting rights might make the IMF uniformly despised, but that is a price worth paying for being seen as an impartial institution that doesn’t just pick on emerging markets and small countries.
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Monday, November 3, 2008

Sovereign defaults are back!


This graph is from a UBS publication (click to enlarge). Over the last few years I have written (together with Eduardo Borensztein, Eduardo Levy Yeyati, Federico Sturzenegger, and Jeromin Zettelmeyer) several papers and a book on sovereign debt and defaults. But people have been telling us that we were stuck in the past.
It looks like that defaults are back. (here is a paper on the cost of default; here is a paper on the elusive cost of default; here is a paper on default and exports; here is book on sovereign debt with a chapter on default; we also have a super cool paper on the Law and Economics of Sovereign Debt and Default but it's not online yet).
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Friday, October 31, 2008

Ayn Rand & Alan Greenspan

This FT piece by James Boyle reminded me of when I wanted to see what all the fuss about Ayn Rand was about and decided to read Atlas Shrugged. Ricardo Hausmann, who is one of the smartest persons I have ever met, told me: why are you reading that? The characters are very flat.

I didn't listen to him and read the book (the whole 645,000 words or 1168 pages, this is 30,000 words more than the 2nd longest book I've ever read ). Why? Well, I thought that if somebody as smart as Alan Greenspan worships her, she must have said something interesting. Of course, Ricardo was right. The book is a piece of junk. I often watch cartoons with my three-year old daughter and find that most cartoon characters are much more complex than the "all good" or "all bad" characters of Ayn Rand. So why does Greenspan like her so much? Who knows?
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Iceland

Buiter and Sibert tell us why it got in to trouble. Check out the scary conclusion: Iceland’s circumstances were extreme, but there are other countries suffering from milder versions of the same fundamental inconsistent – or at least vulnerable - quartet: (1) A small country with (2) a large, internationally exposed banking sector, (3) its own currency and (4) limited fiscal spare capacity relative to the possible size of the banking sector solvency gap: Switzerland, Denmark, Sweden
Tyler Cowen wonders if Iceland is permanently bankrupt. Do we need a HIRC (Heavily Indebted Rich Countries) Initiative?

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Landslide?

Chris Blatmann has always the coolest graphs.
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Is this the dirtiest electoral campaign ever?

John Judis says so.
PS
I have never met Rashid Kahlidi, but he is the brother of my colleague Raja.
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Once we were rollerskaters...

... then, one of us became dr. Doom.
(Luca, Mando, Ugo, Nicola, Nouriel, Pepi. Central Park, sometimes in 2003/2004)

Thursday, October 30, 2008

Stag-deflation?

Here is Nouriel. The dr. Doom name has stuck.
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The coolest search engine

Pixolu, not yet fully functional.
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Pro-Obama video Evita style

Here, priceless. Check this out: My kid plays hockey and I am his mama but I am voting Barak Obama Thanks to Raja. K.
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Build your own X-ray machine

I had read this on the Economist, but these slides are fantastic. Found on MR
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Are you racially biased?

Try this game. Thanks to Alessandro N.
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Tuesday, October 28, 2008

Scary video

Here
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Left wingers: US versus Europe

Very few Europeans (Silvio Berlusconi is a notable exception) would classify the Financial Times as a left-wing newspaper. But Americans are different. Check out this letter: the FT’s slightly left-leaning slant has lost the “slightly”.
And the guy is from Northern California. Texans probably think that the FT is a hardcore communist newspaper. This is a nice paper on why Americans don't like redistribution.
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Monday, October 27, 2008

Bad econometric models...

...bad economic policies. At least this is what John N Muellbauer thinks. Check this out: European central banks, misguided by outdated econometric models, should have cut rates faster and deeper in a coordinated fashion. They should now scrap these models..
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Great maps

from Chris Blattman.
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Summers on the crisis

Here
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The Queen of academic rankings

Anne-Wil Harzing created Publish or Perish and became the queen of academic rankings. This is her journal quality aggregator.
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Sunday, October 26, 2008

Currency crises

Paul Krugman reports on the mother of all currency crises, and Guillermo and Ernesto have all the rights to say I told you so (even though the landing in the North is not so soft)!
BTW, the paper starts like this: A plane in flight is an eminently “unsustainable” object: sooner or later it has to land. Years ago, crashes were alarmingly frequent, so it was hard to fault Aunt Agatha for believing that any flying plane was an accident waiting to happen. Today, of course, her concerns are brushed off by her younger relatives with a condescending smile. Technological advances ensure that the majority of landings are smooth.
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Can you see the great wall from the moon?

No! However, it is still fun to climb it and slide down from it.
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Saturday, October 25, 2008

Participants at the Wuhan training course

Click on the pictures to make them bigger














Letter to the editor

In a couple of old posts I joked about the LHC and the end of the world. Mr Barclay Price (a reader of The Economist) is pointing to another black hole: SIR – Can it really be a coincidence that within weeks of the Large Hadron Collider being switched on for the first time a financial black hole has appeared in the universe?
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Friday, October 24, 2008

The Baseline Scenario

Simon Johnson has a website on the crisis. Here he discusses the possibility of a Euro break up.
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Great Wall


















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Censorship on Italian TV

The FT reports on satirists banned from Italian TV. The list includes Sabina Guzzanti, Daniele Luttazzi, and Beppe Grillo. Sad, sad, sad. The only positive thing is that Dario Fo, who was also banned from Italian TV, ended up winning the Nobel.
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Better than in "The Apprentice"

Here is Donald Trump. I am sure he would love to say "You're fired!"
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Who's the guy with the bow tie and the big S?

Jeff Frankel solves the mistery (I think that Frankel is the one with the SF --Stanley Fischer?-- sign).

More PK material: Why he got it in his own words. Here is Dixit on PK, and here is the full name of one of his precursours.

Here is the unofficial website, full of intersting material.

PS
The picture is from a skit party in the mid 70s. Compare the techonolgy with this.
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Things on which I would have preferred to be wrong

I’m sitting in the airport in Beijing trying to catch up with the news. The world looks scarier and scarier. About one year ago I told a friend that the downsizing of the Fund was a crazy idea and that within two years there would be a crisis in East Europe (probably Hungary) and the Fund will be on the market hiring people in order to have enough bodies to send on mission. My friend told me that I was wrong and that the Fund no longer had a role to play. In fact, I was wrong. It only took one year for the crisis to come. I wonder when the Fund will start recruiting.

In September 2007, UNCTAD wrote an early report on the crisis, I think (but I am not 100% sure) that I was the one who wrote the following (thanks to Raja for digging it out): It is possible however, that the subprime crisis will become a full-blown financial market crisis cum recession. In this "perfect-storm" or crisis scenario, the US goes into a full-blown recession and, as happened in 1998, risk aversion skyrockets. Under this scenario, emerging markets would receive negative shocks on both the real (because of reduced demand for their exports) and financial sides (because of considerably higher spreads). Since most emerging market countries are now running current account surpluses, the crisis would not be as painful as the one that hit the emerging world in 1998. However, it could be painful for the small group of countries in East Europe and Central Asia, which are running large current account deficits. A perfect storm may even cause financial problems to some emerging countries that are running current account surpluses.

Last year, it looked too pessimistic, now it looks optimistic: It's painful for everybody.
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Thursday, October 23, 2008

The wise swedes

From Paul Krugman. President Bush, this morning: In the long run, the American people can have confidence that our economy will bounce back.
John Maynard Keynes: But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.

I have a picture dated 1991 (0r 1990) with a bunch of other grad students and the famous quote. I need to dig it out. (I also have a picture of Keynes Hall in Cambridge University showing that somebody had peed on Keyenes' name, but these were the peak of the monetarist times).
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Iceland jokes

My favorite one:
What's the capital of Iceland?
About $20
What about this quote of the day (from a trader):
"This is worse than a divorce. I've lost half my net worth and I still have a wife."
Via MR.
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I need a hero

the video is here.
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Macroeconomics porn

More often than not, I don't share the views of Arnold Kling, but this paragrah is beautiful: I have always thought that the issue of the relationship between financial markets and the "real economy" was really deep. I thought that it was a critical part of macroeconomic theory that was poorly developed. But the economics profession for the past thirty years instead focused on producing stochastic calculus porn to satisfy young men's urge for mathematical masturbation.
Found here.
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Wednesday, October 22, 2008

What did Heckman say to Cochrane?

A summary of the controversy around the Milton Friedman Institute is in the David Warsh link here (maybe I shodul say something about my friend Hussein, but I don't have time now). A NYT article is here. Here is John Cochrane's summary of the controversy. BUT, the full text of the message from James Heckman to John Cochrane is here (need to go to the end of the article).

ADDENDUM
The last link may not always work. So, here it is: Heckman e-mailed Cochrane a terse response to his concerns: “Screw off, John,” he said.
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Pension funds unprivatization

In this book (joint with E Borensztein and E Levy Yeyati) I had written that pension funds could become victims of their own success. mmmmm
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Tuesday, October 21, 2008

Nice animation

Here. Thanks to Manu Manu.
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On the origins of morality

Excellent TED video by Jonathan Haidt. You can also take the morality test here.
These are my scores (green it's me, blue is the average for liberals and red for conservatives, I am more loyal and less pure than the average liberal)
Thanks to Kristine F.
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Monday, October 20, 2008

UFOs

Here
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