Singer and Easterly

Well worth 46 minutes on Boxing Day

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Excellent Hamilton post

On stock prices (also read the November 2008 and Spring 2009 posts)

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JB on DM

Here. methink: he too kind. But at least he says:

Moyo is less convincing, however, when she tries to argue that aid itself has been the crucial factor holding Africa back, and she verges on deliberate provocation when she proposes terminating all aid within five years -- a proposal that is both impractical (given existing long-term commitments) and unhelpful (since an abrupt withdrawal of aid would leave chaos in its wake).

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Feynman on rubber bands

the great physicist talks like a character from "The Sopranos"

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Worse than losing your computer in a taxi

Lily Sussman's story
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Surely

Surely, no sentence beginning with the word ‘surely’ can validly contain a question mark at its end? However, one paradox is enough for one article …” This was Paul Samuelson
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Paul Samuelson passed away

Here's Krugman
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Strange and interesting places

Here

This place is not too far from Cafasse

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Back from Beirut...

The traffic is out of control, people claim that it is because the city has now several working traffic lights. Here is Dani Rodrik on traffic lights and institutions.
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Website I shoudl check daily

The browser (thanks to manu manu)
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For the price of a one bedroom apartment in Geneva

Here's the story

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Nudge

Just finished reading the book and liked it a lot. Here's the website

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Housing Bubble in Geneva

I've been claiming that there's in housing bubble in Geneva and that price will fall (here and here) and I've been trying to do an econometric study but I've not been able to get data, but look at this for the US, doesn't it look like a Geneva story?

Dastrup and Carson look at how the magnitudes of the price declines correlate with a number of other community characteristics such as overbuilding (as measured by growth in building permits relative to the local labor force), extent of subprime lending, owner-occupied units, and fundamentals such as median income. Dastrup and Carson find that all of these measures were statistically significantly related to the magnitude of the housing price decline. But by far the most important variable was the magnitude of the previous price run-up, which all by itself can account for more than half of the observed variance in the size of the price decline across different communities.

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The are shutting down..

..The Blade (check out the purple shirts). Too bad, it was a great DC institution even for the straight readers (I was once reading a copy on park bench in Dupont, somebody sat next to me, but when he was what I was reading he moved away quickly)

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Back from China

Behind the great firewall there was no Blogger or Facebook. When I got got back, I read this great quote: Jesus probably didn't know much about macroeconomics, even though he was God.

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Heroes in unexpected places

Here

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Housing prices: Geneva versus Switzerland

This an update. The old post is here

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Autometrics

Trying to learn more about it.

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Mercedes Sosa

I'm listening to the CD they gave us at LACEA. Gracias a la vida

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Future of Science

I found this on MR, it is long but very good.

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On rewriting

Here

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Poverty numbers

Bill Easterly: There is an obscure piece of theoretical statistics called “garbage in, garbage out.” Calculating “additional poor in poverty due to crisis” requires (a) knowing what growth would have been in absence of crisis in every country, (b) knowing what growth will actually turn out to be in 2009 or 2010 in every country, not to mention in 2008, since the World Bank’s World Development Indicators do not yet have estimates for that year, (c) having good data on the current level of world poverty, (d) knowing the effect of growth on poverty, (e) projecting the effect of food and fuel prices on poverty, not to mention projecting food and fuel prices.

The reality: (a) is impossible, (b) is almost impossible, (c) Voices of the Vulnerable says the last real global poverty numbers were in 2005, which themselves reflected an upward revision of 40 percent ,(d) is unreliable and volatile, and (e) is impossible.

the rest is here

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Definitions

CHICKENS: The only animals you eat before they are born and after they are dead.

COMMITTEE: A body that keeps minutes and wastes hours.

INFLATION: Cutting money in half without damaging the paper.

SECRET: Something you tell to one person at a time.

SKELETON: A bunch of bones with the person scraped off.

TOMORROW: One of the greatest labor saving devices of today.

WRINKLES: Something other people have, similar to my character lines.

Thanks to RF

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Motorcycle books

I’m almost done reading shop class as soulcraft; weird but interesting. Other nice motorcycle books I’ve read include Jupiter’s Travel (the author describes a night club in Mombasa (Kenya).. as follows: ”there were arm dealers, ivory poachers, currency swindlers, slave traders, Cuban military advisers and agents of the IMF.”) and Zen and the art of motorcycle maintenance. Crappy motorcycle books I’ve read are: Mi Moto Fidel; The Motorcycle Diaries (the movie is much better than the book), and Long Way Round

Here‘s a list from Amazon

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The enemy of development..

...unrealistic expectations

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Colombian friends

What do you think about this

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Paul Romer

On Charter Cities (my Lebanese friends will understand why they need a moteur)

Here is CB on the subject

An interview to Romer here

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Krugman on Skidelsky on Keynes

Here

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It all started with Phelps

Here

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Reverse causality

My 4-year old daughter: the moon did not come out because the sky is very dark and the moon is scared of darkness

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Fox on the UN

The comments are fantastic

The destruction of UN is predicted in Genesis

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What about this super cool

JEL paper

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Back to 1978

Gordon on the state of Macro

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Quote of the day

If everything feels under control, you're just not going fast enough

Mario Andretti

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Il blog di Paolo Manasse

Here

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The Lebanese Madoff

Here: From cousin Amal

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Econgossips

Here (not only job market stuff)

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How much do econ university professors earn?

Here are the salaries at University of Michigan (Ann Arbor). The range seems to be: Assistant professors 100-120k; full professors 170-300k (fields like history pay about half that). Salary of profs at other state universities can be found by searching here.

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James Hamilton on Furlough

I think he's right

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New paper on recovery form recessions

Here

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Family cost sharing in Switzerland

Here

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Need to read when I am back in Geneva

This
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Writing tips...

Here. I liked this comment:

Also, don't make the grad student mistake.

The classic grad student mistake in a talk or a paper is to talk about what was hard, rather than what was interesting.

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The Yacoubian Building

Just finished reading it and loved it. Here is the wikipedia entry

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Posner versus Thaler

Here, Here, Here

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Maids (at the pool) in Lebanon

...right as you’re about to jump in the pool, the resort manager approaches and tells you to stay out of the water because “people are not used to the sight of workers swimming.” .... at least one resort Asian and African workers are allowed to swim in the sea but not in the pool, because “not all people like maids to swim with them in the water.”

The full article is here

Thanks to EJ (AKA, the "Z")

Older posts on the same subject: here; here; and here.

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The best book I've read this year

The Brief Wondrous Life of Oscar Wao. I think one should read The Feast of The Goat first (even toough Junot Diaz does not seem to like Vargas Llosa's book; too nice to Balaguer?)

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Journal for rejected papers

So far only in math. (found on MR). The first time I heard the idea of a journal for rejected papers was 15 years ago from Alberto Cassone.

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Cheesecake factory

Here is an article. I went there twice and found it disgusting. The second time was to see how my parents would react. You should have seen my mom's face when they brought her a salad which could have fed 15 people.

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The 4th most expensive city in the world

Here

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My first job and then scholarship

Here, the second is here

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Easterly on Collier

here
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Restaurant prices

Prices of the buffet at Massaya (Here is the menu with prices):

• Adults: $33;
• Children between 15-10: $20;
• Children between 9-4: $15;
• Nannies: $20!!!

Micro 101 question: Why do nannies pay less?
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prices

Off to Beirut (for one month)

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Interview with Samuelson

Waiting for part 2. In the meantime:

And this brings us to Alan Greenspan, whom I've known for over 50 years and who I regarded as one of the best young business economists. Townsend-Greenspan was his company. But the trouble is that he had been an Ayn Rander. You can take the boy out of the cult but you can't take the cult out of the boy. He actually had instruction, probably pinned on the wall: 'Nothing from this office should go forth which discredits the capitalist system. Greed is good.'

However, unlike someone like Milton, Greenspan was quite streetwise. But he was overconfident that he could handle anything that arose. I can remember when some of us -- and I remember there were a lot of us in the late 90s -- said you should do something about the stock bubble. And he kind of said, 'look, reasonable men are putting their money into these things -- who are we to second guess them?' Well, reasonable men are not reasonable when you're in the bubbles which have characterized capitalism since the beginning of time.

part two is here

By the way, I don't want you to think that I think that everything for the next 15 years will be cozy. I think it's almost inevitable that, with a billion people in China wide awake for the first time, and a billion people in India, there's going to be some kind of a terrible run against the dollar. And I doubt it can stay orderly, because all of our own hedge funds will be right in the vanguard of the operation. And it will be hard to imagine that that wouldn't create different kind of meltdown.

Last thing. Mea culpa, mea culpa. MIT and Wharton and University of Chicago created the financial engineering instruments, which, like Samson and Delilah, blinded every CEO -- they didn't realize the kind of leverage they were doing and they didn't understand when they were really creating a real profit or a fictitious one. There 's a lot of causality in economics, even though it's very far from an exact science.

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Krugman interview

Here

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Forecasters

here

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Cipolla applied to Italy

From M.G. in progress

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From today's FT

Sado-monetarists and reasonable people

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Museums (economics and modern art)

Rigotnomics has a post about the economics museum in Mexico City. I know that the University of Buenos Aires has a museum dedicated to external debt crises but I've neve seen it. I will try to go when I go to LACEA this October.

Talking about muesums, last week I was in London and went to Tate Modern. It's amazing. I got goosebumps from this Cattelan piece.

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Paul Krugman likes one of my favorite movies

Here is a quote

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Brad DeLong on Posner and the Chicago School

Here

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FT exchange rates

The Financial Times is the best place to sell your dollars. In the normal world 1 USD buys you 0.7 euro cents or 0.6 pence. In the FT world 1USD buys 1.7 euros (2.5 times the normal exchange ate) or 0.8 pence (1.3 times the normal exchange rate). 

Here it is: How much would you pay to read this page? At about 2,000 of the roughly 50,000 printed words in a typical copy of the Financial Times, it should in theory be worth about 4 per cent of the newspaper's cover price - 10 US cents, 17½ euro cents or eight pence.

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Growth after the crisis

New (at least to me) paper by Dani Rodrik

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Popper on research

via CB

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Wolframalpha

This may become bigger than Google. The intro video is here (well worth the 13 minutes). I found it on MR. It has a lot of economics stuff.

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On chewing and french bread

Here

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The big problem of small change

Via MR, I found this article on lack of coins in Argentina. The same thing happened in Italy in the 1970s. There is actually serious research on this. I think that it started with Cipolla (his laws of stupidity are here). The most recent work is by Sargent and Velde. 

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Refuted economic doctrines

Here

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More on the state of Macroeconomics

Blanchard versus others (De Long says that others win).  This is an older post on the same subject

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Of Financial Innovations and Excesses

From the Journal of Finance, July 1985: 

In the case of the corporation, a manager does not want to miss out on a perceived good thing if everyone else is doing it....executives are attracted to a new repackaging of mortgaged-backed securities, even though they could manufacture essentially the same thing themselves at a lower cost. Like ants attracted to the honey pot, this is a bonanza for financial promoters. Each time a defeasance plan, leveraged buyout, or new type of mortgage-backed security is sold, substantial promoter fees are realized. But do they make money the old fashioned way by earning it? I think not in many cases.

James C. Van Horne, President of the American Finance Association (1984)

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Development and business class

Chris Blattman has a post with great comments (read the second one by Bill Easterly and the two by April on WB compensation).   I don't think that moving to economy would greatly affect the budget, it's more a symbolic thing. 

My two cents: I used to care less about BC travel and always (or almost always) travel economy, but the older I get the more I give value to BC. I would try to avoid more missions if I had to travel economy (of course, this may still be optimal from society's point of view).   

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Syrian English

Jeep

Dream house

Good bye

VIP

Paint

No Parking

Thanks to Raja

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What's economics

Rigotnomics has a nice post on the meaning of "economics", but I can't believe that they like Dambisa Mojo (BTW did you see who wrote her Time profile?). My other point of disagreement with Rigotnomics.
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Stress tests

Baseline scenario explains

My work on public banks: here and here

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The Ph. D. Octopus

An absurd story from 1903

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Why economists write papers and not books

The making of Economic Literature (presidential address to the American Economic Association, 1909). My favorite parts: 

A three hundred page thesis not only does not fit a man to be an economist: it really incapacitates him for work...I hold that the better the economist the clearer, shorter, and more precise are his utterances …A book is merely the trail along which its author has gone in his search for clear expression and sharp analysis. This is of great importance to the author, but of little consequence to the reader.

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Conferences I wish I had attended

Can you get better timing?

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Religion and education gender gap in Lebanon

Things are different form what you may think. (ungated version here)

My other Middle-East related papers are:

• “Macroeconomic Policies in Egypt: An Interpretation of the Past and Options for the Future,” Journal of Development and Economic Policies (December, 2002). Download Working Paper
  
•  “Fiscal Sustainability: Issues for Emerging Market Countries” (with A. Izquierdo) in A. El Galal and N. Ul. Haque (eds)Fiscal Sustainability in Emerging Markets: International Experience and Implications for Egypt. AmericanUniversity in Cairo Press (2006). Download Working Paper
  
•  “Poverty and Social Mobility in Lebanon: A Few Guesses.” (with M. El Khoury) Forum, Newsletter of the Economic Research Forum for the Arab Countries, Iran and Turkey. 8: 12- 13.  Not Available online
  
•  “Education, Childbearing, and Female Labor Market Participation: Evidence from Lebanon,” (with M. Hajj) Journal of Development and Economic Policies (June, 2002). Not available online
  
•  “Social Mobility and Religion. Evidence from Lebanon” (with M. El Khoury) Research in the Social Scientific Study of Religion (Fall, 2005). Download Working Paper
  

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Very very strange buildings

Here and here.

Thanks to Sweta for the idea and dedicated to SiL Nadine, the architect

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Better LATE than nothing

Imben's response to Deaton and Heckman and Urzua. This debate is really cool. 

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Google!

Data searching and plotting

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Eichengreen on Economic research in the 21st century

Here, more on Barry here

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Chris Blattman loves Colombia (and he's right)

Here and here.  I've been to Cartagena several times (it's wonderful, but careful with aguardiente) and I may go to Medellin in August, but I haven't yet visited to Bogota (I was so sorry to miss the Economia panel a couple of weeks ago).

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A macro lesson

From PK

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Sugar count

here.

check out the shakes

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Interpreting GDP Growth

From Baseline Scenario. Another post, which I would rename French Sociology and the Education of Tim Geithner is also intersting and shold be read with the, by now classic, Atlantic piece on financila oligarcs.

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Interesting research topic

Very interesting indeed.   It starts like this: 

It used to be conventional wisdom among biologists that human beings are unique in experiencing female orgasm, but no longer. Nonetheless, female orgasm remains both a marvelous phenomenon and a contentious, unsolved mystery among evolutionary biologists.

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Polya’s rules

I am reading Polya’s Hot to Solve it. It’s an amazing book (one of the few math books that sold more than one million copies). Here are some of Polyia’s rules:

• Rules of discovery. The first rule of discovery is to have brains and good luck. The second rule of discovery is to sit tight and wait until you get a bright idea.
  
• Rules of style. The first rule of style is to have something to say. The second rule of style is to control yourself when, by chance, you have two things to say; say first one, then the other, not both at the same time. 
  
• Rules of teaching. The first rule of teaching is to know what you are supposed to teach. The second rule of teaching is to know a little more than what you are supposed to teach. 
  

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Prebisch biography

I just finished reading the Life and Times of Raul Prebisch and liked it a lot (I now understand UNCTAD and the UN much better, the book should be a required reading for all UN economics affair employees). 

However, I think that some of the statistics quoted in the book (especially those on the relative standing of Argentina) are wrong, but I will double check. 

Here is a review of the book by The Economist; Here is Tyler Cowen; Here are the 13 Prebisch lectures held so far.   

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Negative rates

From Greg Mankiw. The whole article is here.

The provocative idea in the article: So why shouldn’t the Fed just keep cutting interest rates? Why not lower the target interest rate to, say, negative 3 percent?  At that interest rate, you could borrow and spend $100 and repay $97 next year. This opportunity would surely generate more borrowing and aggregate demand. The problem with negative interest rates, however, is quickly apparent: nobody would lend on those terms. Rather than giving your money to a borrower who promises a negative return, it would be better to stick the cash in your mattress. Because holding money promises a return of exactly zero, lenders cannot offer less. Unless, that is, we figure out a way to make holding money less attractive. At one of my recent Harvard seminars, a graduate student proposed a clever scheme to do exactly that. (I will let the student remain anonymous. In case he ever wants to pursue a career as a central banker, having his name associated with this idea probably won’t help.) Imagine that the Fed were to announce that, a year from today, it would pick a digit from zero to 9 out of a hat. All currency with a serial number ending in that digit would no longer be legal tender. Suddenly, the expected return to holding currency would become negative 10 percent. That move would free the Fed to cut interest rates below zero. People would be delighted to lend money at negative 3 percent, since losing 3 percent is better than losing 10.

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Top Worldwide Sources of Eventual Economics Ph.D.s, 1997-2002

1. Seoul National University Korea
   
2. Harvard University USA
   
3. National Taiwan University Taiwan
   
4. University of Delhi India
   
5. University of California, Berkeley USA
   
6. Universita Commerciale "Luigi Bocconi" Italy
   
7. Yonsei University Korea
   
8. Stanford University USA
   
9. Beijing University China
   
10. Cornell University USA
    

Full data are here

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Financial innovation for dummies

From BLS

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The Olympics may be good for your exports

The Economist thinks that hosting the olympics is always a lousy deal (can't find the article with the exact quote), but Rose and Spiegel find that it may be good for trade.

Thanks to Salvatore

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Computing P/E ratios

Here

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4 trillion!

Toxic debt may reach $4 trillion. This is about $650 for each inhabitant of the planet, or about 10% of the income per capita of the planet (which is about $7,000). The income per capita of India is about $700 and that of China $1,700. 

The TOTAL income of China and India is about $3 trillion, if you add up the total income of Spain (about $1 trillion) you get to $4 trillion. (income data are 2005 GNI from the World Bank WDI). 

How much would Dr Evil ask?

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Change at the BWI

Here is Simon:

The managing director of the I.M.F. ... has always been a European... this is code for saying they will pick someone from an emerging-market country, such as India or Brazil...

To make matters more interesting, the I.M.F.’s managing director is expected by insiders to resign within a year, to resume his (promising) pursuit of the French presidency. 

How did the Obama administration pull this off....by volunteering to open up the selection process for the World Bank...which has always been run by an American. The next president of the World Bank is very likely to be Chinese.

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