Friday, October 30, 2009

Weekend Econlinks

Wednesday, October 28, 2009

Mating, development aid, and the econometrics of it all

I recently helped one of my single male graduate students in his search for a spouse.

First, I suggested he conduct a randomized controlled trial of potential mates to identify the one with the best benefit/cost ratio. Unfortunately, all the women randomly selected for the study refused assignment to either the treatment or control groups, using language that does not usually enter academic discourse.

With the “gold standard” methods unavailable, I next recommended an econometric regression approach. He looked for data on a large sample of married women on various inputs (intelligence, beauty, education, family background, did they take a bath every day), as well as on output: marital happiness. Then he ran an econometric regression of output on inputs. Finally, he gathered data on available single women on all the characteristics in the econometric study. He made an out-of-sample prediction of predicted marital happiness. He visited the lucky woman who had the best predicted value in the entire singles sample, explained to her how he calculated her nuptial fitness, and suggested they get married. She called the police.

Continue reading this brief masterpiece by Bill Easterly.

Sunday, October 25, 2009

Timeless Dances (On Fado and Didge Fusion)

... performed by a fantastic crew of the Queensland Ballet, on their European Tour. François Klaus's choreography is pure genius work, while William Barton is a most fascinating didgeridu virtuoso and composer (not to mention that he also proved to possess great vocal skills and to play top guitar). Here's an excerpt-- the only one I have managed to find on YouTube-- apparently from the very premiere of the show a year ago in Australia, identical to what I saw a couple of hours ago at the Musikhuset in Aarhus; this is from the final part, arguably the best, of Klaus's Timeless Dances arrangement, carried out on an electric guitar-didgeridu fusion background. Enter Queensland Ballet & William Barton!

My other absolute highlight (naively attempting to further differentiate somehow: every part in the program was a highlight!) from tonight's ballet agenda was Klaus's perfectly choreographed and superbly executed pas de deux in Chant d'Amour; music-wise, a succession / combination of two songs from Madredeus's O Paraíso album (ironically, this album is thought to be the one that marks Madredeus's split with its fado roots; I would say that it is debatable to what extent each individual track still claims that heritage), "A Andorinha da Primavera" and respectively "Coisas Pequenas", interpreted by the one and only Teresa Salgueiro (earlier on Madredeus; more on Portugal & fado). Timeless indeed!

Sunday econlinks

  • An interesting debate in the latest issue of Capitalism and Society on the current status of Economics and other Social Sciences, worth reading especially for the two comments to the leading article on the theme. Unfortunately, Jon Elster, in his "Excessive Ambitions", otherwise a welcome (and relatively informed) outsider's critique, does not manage to rise up to his declared ambitions of debunking the status quo / portraying "the persistence in the economic profession and elsewhere of these useless or harmful models", and eventually falls easy prey to his commenters: Pierre-André Chiappori (who, very elegantly, but unmistakenly, tackles most of the points raised by Elster in his criticism of economic theory and testing its predictions) and respectively, David Hendry (who virtually destroys Elster's line of reasoning and conclusions on empirical modelling in Economics). To add up to that, beyond the many (surprising!) fallacies that Elster commits in his scientific criticism (not even half of them acknowledged, e.g. his sole reliance on third-party sources in the discussion of the criticism to the empirics is somewhat revealed, however the very selected sample of those sources --strategy common also to his earlier sections-- does not seem at all problematic to the author), what strikes me throughout his text is his often bringing up the lack of "humility" of economists (e.g., "The competence of economists may not be in question, but their humility is"), although in reading his piece I was rather intrigued by Elster's own absence of humility whatsoever in his strongly opinionated, though insufficiently argued, assessment... I was really hoping for something more serious.
  • Solving the public-goods free rider problem using neuronal measures of economic value. Looks super interesting!
  • "[D]oes conspicuous consumption fall and efficiency increase in a society in which income is conspicuous?" or some of the potentially positive implications (research-wise only...) of Norway's recent crazy move to make public all tax records of its (tax-paying) residents...
  • Even Robert Parker can make a total mess of himself when it comes to wine blind tasting (via cheaptalk). And a short review of a new wine book by somebody who really doesn't like Parker (thanks to Fred for the link).
  • "Wellicht komt er ooit een nieuw paradigma dat voor de economische wetenschap net zo revolutionair zal zijn als kwantummechanica is geweest voor de natuurkunde. Tot die tijd is het beter om te blijven schipperen met de kapstokken die we hebben in plaats van alles jassen op één grote hoop te gooien." door Wouter den Haan, op MeJudice
  • An older interview with the foremost cafeteria Keynesian (Part 1, Part 2). I only agree with about 50% of what he's saying here... And I think some are just too fast in dismissing Milton Friedman, but... on verra.
  • Norman Manea on Herta Muller's Literature Nobel. Though ultimately there isn't much in there about her Nobel..., which might actually be the whole idea of that post.
  • Brinkmann, Ehrman and the fall of the Berlin Wall. Very interesting, all news to me.
  • Is shouting the new spanking? Hopefully not.
  • I generally agree, though, for instance, Econophysicists seem to have a hard time both on the Economics and on the Physics academic/ publishing market. Not that I wonder much why that is the case, but others may...

Friday, October 16, 2009

New Renaissance in European Research...

The First Report of the European Research Area Board.

Now, overall this looks like a great step ahead and I would like to see it indeed as a commitment (by the ERAB, the Commission, the relevant decision makers). It is easy to note the pros, so I shall highlight briefly what I see as major cons therein. They [the ERA Board] do cite Schuman, "Europe will not be made all at once, or according to a single plan. It will be through concrete achievements which first create a de facto solidarity" (emphasis added), but some of their proposals/ intentions/ targets are anything but concrete/ focused/ rational. One also hopes that the list of "six broad areas in which [they] believe action must be taken" de facto starts with "the encouragement of excellence", on paper only item number 5... And that the gender affirmative action envisaged really means equality of opportunity and never gender choice prevailing over merit... And that the multi-disciplinarity so much talked about is supposed to arise naturally, not to be imposed a priori... I guess they still need that serious research appendix to the "New Renaissance".

Thursday, October 15, 2009


  • Eric Maskin on the financial crisis (Mankiw, Cheaptalk and MR link to this interview, among others). Maskin is one of the smartest persons alive, so this is mandatory-- a must read in particular for those who'd like to crucify all economic theorists :-). I would also link however to a very interesting blogpost by Harald Uhlig, on VoxEU (a summary of his recent NBER working paper): he really extends the Diamond and Dybvig (1983) bank run model that Maskin starts with, such that it incorporates the stylized facts specific to the current financial crisis. Uhlig also makes very clear that this is just one way to view things and in fact that insolvency rather than illiquidity might have been the main culprit: "It is possible that the appropriate perspective is one of insolvency rather than illiquidity, and future research will hopefully sort this out."

  • Of course Oliver Hart should have won this year's Nobel as well (and Bengt Holmstrom). I cannot but agree with Aghion here, as I made clear in my prediction for the Econ Nobel within the last 3 years... Returning to Elinor Ostrom, there are by now many reactions. Most of them seem to be as confused /skeptical as I was after the release of the results, e.g. Ely, Baliga, Levitt (I disagree with Levitt's "suspicion" that most young economists also did not hear about Williamson), to some extent even Cowen ("I was delighted to hear of Ostrom winning (which I had not expected) but frankly it makes the omission of Gordon Tullock all the more glaring" ) or Krugman ("I wasn’t familiar with Ostrom’s work"); nevertheless Economists who work /worked in public choice and related (the tragedy of the commons, in particular) seem delighted with the choice, e.g. Spence, Glaeser, Romer, Smith, Tabarrok, Gächter (the latter cited in this Science short article on the Econ Nobels). The conclusion of all this (once again) is that I really have to read Ostrom's main works sometime in the near future (meanwhile I also found out that apparently she's got at least one article in a mainstream Economics journal)-- and to accept that yes, to a great extent, we are all very ignorant.

"The journal submission process is a controversial and stressful part of academia. There are many dimensions of uncertainty, and bad decisions could greatly delay publication of important results and harm one's career. This paper provides new evidence that, on the whole, the advice supplied to young faculty members by veterans of academia is correct. Authors largely have an incentive to submit first to the best journals and then subsequently, wortk their way down a schedule of journals. The exceptions to this simple rule occur when authors are particularly impatient or risk-averse.

We also note, however, that the efficiency of the system may be improved by a system in which journals reduce time lags, perhaps through incentive-based rewards for faster reviewing by referees, and increase submission fees. This system reduces the impact of time-lags on impatient or risk averse authors and more efficiently rations submissions to journals- higher reward journals will get more submissions of high-quality papers and fewer submissions of low-quality papers. This also streamlines the publication process, shortening the time during which important results are sitting on a desk, waiting for publication. "

Monday, October 12, 2009

Half of a Nobel

Certainly Williamson was expected to win sooner or later (sooner rather than later), in fact I predicted him to be winning, yesterday (and a year ago, and two years ago...). But then together with Hart and Holmstrom.... Honestly, I have to say that I have never heard of Elinor Ostrom, before discussing whether I have read anything of what she's written. But perhaps it is high time I found out more about her work-- before I decide to call half of this prize a flop, just as the Literature and the Peace Nobels this year (what happened with these Nobel committees?!...)... Meanwhile congratulations to Oliver Williamson of course; this is a very deserved and, in fact, very delayed honour!

Sunday, October 11, 2009

Nobel Econ prediction(s)

After the Nobel flops for Literature (Herta Müller is ok..., but the Eurocentrism of the Nobel Literature commitee remains obvious; e.g. how can you still keep out Philip Roth or Michael Ondaatje, that after having ignored all US & Canadian top writers for the last several decades?! ) and Peace (I guess nobody beats Greg Mankiw in describing that), let us hope for a vindication with the '09 Nobel Economics prize.

It's simple, I will be consistent :-), thus my bet for tomorrow is: Hart, Holmstrom and Williamson for their contribution to the theory of the firm. This despite that others/ more or less official odds would suggest otherwise (see for instance Thomson Reuters, Ladbrokes, Kellogg & Northwestern), and although my personal favourite is Dale Mortensen (for developing search theory, with Peter Diamond and Chris Pissarides). Of course you might know that I am part of Dale's LMDG group in Aarhus and for instance just returned from a great conference program he put together in Sandbjerg, but, bias aside :-), I cannot imagine search theory not being rewarded with the Nobel within the next couple of years.

Wednesday, October 07, 2009

My whereabouts

From tomorrow till Sunday I'll be attending the Conference on "Structural Models of the Labor Market and Policy Analysis" at Sandbjerg, inter alia meeting once again several friends/ co-authors/ mentors. Ex ante, the program looks great, notwithstanding my non-presenter role this time (unlike the analogous conference last November, in London). Here's more on the Sandbjerg Manor, a close-to-ideal conference location (some say this place is "too dark"... well, duh... we are in Denmark; moreover, I am from Transylvania: darkness is good for my kind).

Tuesday, October 06, 2009

The connoisseur of prostitution

Likely no good economist, surely a bloody good writer. Gems:

3. "You lie to two people in your life; your partner and the police. Everyone else gets the truth."
2. "The problem with normal sex is that it leads to kissing and pretty soon you’ve got to talk to them."
1. "The big difference between sex for money and sex for free is that sex for money usually costs a lot less."

Hmm... he might still turn into an Economist :-).

Monday, October 05, 2009


  • The Nobel Ig prizes this year. My favourite is the Literature one: "Ireland's police service for writing and presenting more than fifty traffic tickets to the most frequent driving offender in the country — Prawo Jazdy — whose name in Polish means 'Driving License'". Almost as good as the Nigerian Literature Ig winners a while ago. At the same time, the Economics Ig for '09 is somewhat forced; the whole Icelandic population should have gotten it: as we know, they were all into banking until rather recently.

  • Writing from Schiphol, after almost 11 hours return flight from Tokyo. Detailed impressions in due time. Now boarding again.