Despre economia Romaniei (si nu numai). Fragmente dintr-un interviu nepublicat

Cat de “negru” considerati ca va fi 2012 din punct de vedere economico/financiar si cum ar putea fi afectata Romania?

Nu avem, din nefericire, motive sa jubilam. Pe fondul deteriorarii perspectivei economice in general, si datorita crizei din zona euro in particular, 2012 va fi incert si pentru Romania.  Dupa cum stim la ora asta, toate agentiile globale au revizuit in scadere previziunile privind evolutia economiilor europene, din eurozona si din afara ei, incluzand aici FMI, Banca Mondiala, BERD etc. Fara sa dau prea multe detalii asupra a ceea ce puteti gasi practic in toate aceste rapoarte, fac o scurta trecere in revista a catorva dintre aspectele economice care ar putea fi direct afectate in Romania (NB: discutii mai specifice despre unele aspecte sunt prezente si in alte parti din acest interviu):

-       exporturile; criza eurozonei ar putea afecta cei mai importanti parteneri comerciali ai Romaniei (peste 70% din comertul exterior—ca volum exporturi plus importuri—este cu statele UE, in particular Italia, Germania si Franta), reducand substantial perspectiva exporturilor romanesti, unde nu stateam pe roze nici pana acum (deficitul comercial in Octombrie 2011 era de 747 milioane de euro, de unde am “revenit” de la mai rau)

-       accesul la credite; exista posibilitatea ca bancile straine (care detin 80% din activele bancare din Romania) sa isi reduca critic expunerea pe pietele emergente din centrul si estul Europei pe fondul crizei din eurozona (o restrangere substantiala a creditarii s-a facut deja in trimestrul trei al 2011).

-       riscul financiar; tot prin relatiile financiar-bancare importante cu banci expuse crizei euro-zonei, varianta (“spread”-ul) CDS-urilor ar putea sa creasca si mai mult (in cazul Romaniei s-a marit deja cu peste dublul mediei caracteristice economiilor emergente), implicand incertitudine mult marita pe piata financiara

Catalizat de impactul asupra dimensiunilor economice de mai sus, se pot anticipa si consecinte negative indirecte, de exemplu nevoia de noi masuri de austeritate bugetara, avand in vedere ca avem deja  imprumuturi foarte mari (transa recenta de 5 bilioane de euro de la FMI adaugandu-se imprumutului de 27 bilioane garantat de FMI si UE in 2009) si nivelul deficitului bugetar maxim e fixat, conform acordurilor cu creditorii; inrautatirea indicatorilor pietei muncii (lipsa noilor locuri de munca, somaj in crestere, salarii inghetate, ajutoare sociale anulate s.a.m.d); reducerea bugetelor alocate educatiei si cercetarii, unde suntem mult sub tintele propuse si incredibil de mult sub cele optime s.a.m.d. Cert este ca va fi nevoie de eforturi mari pentru a sustine o crestere economica pozitiva in viitorul apropiat. Discut in finalul acestui interviu despre masuri implementabile in viitorul apropiat care ar putea ameliora aceasta perspectiva economica.

 [...]

Am vazut ca sunteti la curent cu ceea ce se intampla in Romania (am vazut pe blog ca ati postat un editorial a lui Tapalaga).  Care ar putea fi cateva masuri pentru evitarea unei recesiuni in Romania (asa cum multi se astepta pentru 2012)?

In lipsa spatiului, ma voi limita doar la doua categorii principale (plus cateva subcategorii) de masuri pe care le consider importante pentru viitorul apropiat.

-       Guvern de tehnocrati si implicare mult mai mare a electoratului (legislativului). In momentul in care ar fi nevoie de ei mai mult ca niciodata, echipa guvernamentala nu are un singur economist credibil. In plus, alegatorii nu sunt implicati deloc in decizii economice care ii afecteaza imediat. Sa facem o paralela intre doua democratii-- in teorie ambele functionale. In SUA, Presedintele isi ia foarte in serios rolul de se consulta (in practica, de a urma recomandarile)  pe orice tema economica cu echipa sa de consilierii economici (“Council of Economic Advisers”, i.e. CEA) si de convinge publicul/legislativul asupra necesitatii unor masuri recomandate de acestia; pozitia este perfect descrisa de citatul “spuneti-mi ce e corect, si ma voi gandi cum sa vand asta cel mai bine” (conversatie publicata intr-un memoriu CEA, intre Presedintele Obama si Christina Romer, fosta sefa a CEA). In Romania, politicile economice se decid in aparenta fara consultarea expertilor si se implementeaza fara implicarea alegatorilor (alternativ, a reprezentatilor acestora in Parlament), prin “asumarea raspunderii” Guvernului; pozitia Executivului (si a Presedintiei) aduce deci mai mult cu “nu va bateti capul, stim noi bine ce facem”[1].

-       Incetarea reducerii cheltuielilor bugetare si axarea pe reforme structurale pentru crestere durabila pe termen lung, in (cvasi)recesiuni. Multe din masurile de consolidare fiscala de pana acum, chiar si cele justificabile pe termen mediu si lung, au fost implementate prea brusc, la momentul inoportun. Reducerea cheltuielilor bugetare in perioade de recesiune curenta sau anticipata este controversata: nu exista o minoritate consistenta de economisti care sa le recomande fara rezerve. Desi nu avem un model teoretic cu previziuni precise, cele mai robuste rezultate empirice arata ca austeritatea in episoade de recesiune a fost urmata de episoade de prelungire, sau chiar agravare a recesiunii. In lipsa unor concluzii decisive in privinta cauzalitatii, avem suficiente motive sa anticipam efecte negative; ori cand vorbim de politici economice, bunastarea cetatenilor este obiectivul prioritar. Accentul trebuie pus pe reforme structurale de relansare economica, care sa induca o crestere economica durabila. Foarte succint, exemple de asemenea masuri necesare in Romania ar fi (pe langa masurile neimplementate de mai jos, unele au fost implementate doar superficial/partial si trebuie continuate/intensificate; in alte cazuri unele reforme s-au implementat exact pe dos, vezi de exemplu reducerea unor cheltuieli de finantare a cercetarii ca parte a pachetului de masuri de austeritate etc.):

o    Reforme ale pietei muncii. In contextul Romaniei, masurile pe partea cererii fortei de munca sunt in prezent prioritare, intre ele stimularea crearii de noi locuri de munca. Pe de alta parte masuri de stimulare a participarii in forta de munca ar trebui sa ramana in agenda tot timpul (superficial unele au fost implementate; de remarcat insa aici ca masuri gen reducerea ajutoarelor de somaj in perioade de recesiune, cand factual problema e lipsa locurilor de munca, dovedesc orice altceva decat competenta si responsabilitate sociala).

o    Reforme de privatizare. Privatizarea marilor companii de stat a fost de mult discutata, mult promisa, dar inca neefectuata; costurile intarzierilor sunt uriase. Privatizarea sistemului medical (NB facuta inteligent: copierea sistemului olandez sau elvetian “dupa ureche” nu e o solutie) este un alt exercitiu care trebuie finalizat etc.

o  Reforme de incurajare a antreprenoriatului. Masuri din aceasta categorie includ exemple gen stimularea prin deduceri de taxe in primii ani de activitate antreprenoriala, reducerea birocratiei necesare deschiderii unei afaceri proprii (in iunie 2011 eram pe locul 63 in lume din punct de vedere a cat de usor este sa devii antreprenor si pe locul 72 in clasificarea a cat de usor este sa functionezi ca antreprenor; cred ca se poate mai bine)

o    Reforme pentru R&D. Include cresterea investitiei in activitatile de cercetare si dezvoltare (R&D), si, implicit, in adaptarea si sustinerea invatamantului pentru a produce capitalul uman necesar acestor activitati.

o    Masuri de stimulare a investitiilor private din strainatate. Atragerea de capital privat este in prezent esentiala pentru Romania. Alternative existente pentru investitii (publice si/sau private) precum fondurile europene structurale si de coeziune (chiar la o rata de absorbtie de multe ori mai mare decat cea de pana acum) sau genul de parteneriate public-privat in derulare nu sunt suficiente sau neaparat sustenabile.

Puteti citi intreg documentul (10 intrebari + raspunsuri) in format PDF aici. 

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[1] Citatul e imaginar, insa din categoria celor reale oferite de Executiv, si mai ales de Presedintie. Un exemplu elocvent din discursul recent  al domnului Basescu la investirea noului guvern: “Nu pot cere unui popor sa inteleaga prompt ce trebuie sa faca un guvern pentru ca tara sa nu se prabuseasca”.

Econlinks: The Dale T. Mortensen Nobel edition

• The most recent event under this heading is the Northwestern conference in the honor of Dale-- with some very good and some not so good presentations...-- featuring also some  very (and some not so) entertaining speeches by former Mortensen students, co-authors, advisers etc, either at the dinner at the Northwestern Allen Center on Friday evening, or at the drinks & snacks session at Beverly and Dale's splendid home (photo with Ija on their balcony) on Saturday evening. Read also this Northwestern Univ. article about the event.  If you ask me, Guido Menzio had both the most interesting presentation ("Social Insurance for Frictional Wage Inequality") and by far the best speech (let us call it "Guido, may the Force be with you!"); unfortunately, neither of them is available online, too bad if you were not there.
• Now rewind: I have first mentioned about Dale's Prize here, as some of us really were with Dale in Denmark when he got the magic phone call (this happened after I had correctly predicted Diamond, Mortensen and Pissarides winning the Prize in Economic Sciences, the day before). I'll try to organize the following links on chronological order since.
• Listen to the initial phone interview between the Nobel Foundation's Adam Smith and Dale (you might have heard about the funny Adam Smith phone call to Ned Phelps's home some years before; people are somewhat more prepared to Adam Smith calling them since...).
• Here's Dale's answering machine message about the Prize to Beverly Mortensen: have your sound on as well-- this is super funny.
• I have uploaded on Flickr one of my short videoclips from the John Abowd seminar in Aarhus, at the Aarhus School of Business (ASB), Dep of Econ building, which started with champagne for Dale (unfortunately the sound seems to have gotten lost on the way...). All spontaneusly organized my myself, Valerie and Frederic: I think we managed quite well. I even made sure these visiting guys were not missing the start of the party (even if Shimer thought I am trying to trick him to get him to the seminar--duh..., Rob!...-- when I called with the Dale-won-the-Nobel news)
• The first Aarhus Univ journalist & photographer arrived for Dale (hallway of the ASB's Frichshuset) and here's a very first Dale video interview, just outside the Frichshuset, in which Dale tells the Danish reporter that yes, the Danes can also feel proud because of his winning the Prize.
• After a first full day of interviews and photo sessions for Dale, the first dinner party takes place at one of my very favorite restaurant in Aarhus, Klassisk 65. Thanks to Valerie for helping me with the organization (we had planned the dinner at Klassisk for that day in any event; with Dale winning the Prize in that day, we had to try hard to include more people on the reservation list, and plan in  much more detail). Watch the official TV2 documentary (very slow, be patient) from the place, including the by now famous Dale-sabring-the-champagne-bottle moment(s). I uploaded one of my own videoclips from Klassisk as well (again no sound). 
• A nice video capturing Dale's returning to Chicago from Denmark, with family and the NU brass band welcoming him at O'Hare. 
• One advantage of being  affiliated both with Aarhus and Northwestern is that I got to participate in all the Dale Mortensen-parties! Obviously Northwestern had to rise up to the occasion, and I think they managed well: there were several events, including two parties--one Department of Economics-wide, one NU-wide -- organized in relation to Dale's winning the Prize. Here's the best moment from the first NU party, where, having heard of Dale's champagne-sabring demonstration in Denmark, he was asked to confirm his skills also in Evanston-- and I had the honor to assist (clip borrowed from Jeff Ely on Cheaptalk). Here's a fantastic picture, the ultimate proof of Dale's champagne-sabring mastery! 
• An article with a link to a clip containing the best moments from the NU-wide reception for Dale; Janice Eberly and Bob Coen in particular prepared wonderful speeches. Some other NU press articles with video- and photo- links: Dale winning the Nobel and first reactions from NU Econ faculty colleagues, summary of and photos from the celebrations in Stockholm; see also some other Dale Mortensen photos from Stockholm and not only, collected on the Nobel Foundation site.
• There are also by-products of winning a Nobel prize, such as: getting a whisky bottle and-- if, justifiably, you thought that was no big deal-- a whole building named after him, at Aarhus University (with the participation at the opening, of the other Nobel Laureate at Aarhus, Jens Skou, and of the DK crown prince) ; a permanent parking spot and some other very visible (temporary) honors, at Northwestern University; hanging around with Mr. President-- good, better (my own photo capture of the framed pictures adorning the walls in the Mortensens' apartment). 
• You can also check out some more related pictures and videos that I collected (some belong to Aarhus University, some to Northwestern University, some to the Nobel Foundation, some are mine --including from the Econ Prize lectures, which I watched live, online, on my laptop, from Chicago-- I tried to specify everywhere whom they belong to  in order to observe copyright issues-- comment on this post or contact me if you observe anything wrong or unclear in that sense) and uploaded on my Flickr acount.
• Finally: the best way to learn (more) about last year's Prize in Economic Sciences in Memory of Alfred Nobel is to browse through the corresponding pages on the Nobel Foundation's website. There is a great wealth of material in there (and more will be uploaded in the future, including, e.g., autobiographies of the Laureates), such as informative articles-- both brief and longer--, interviews, documentaries, photos etc. For instance, you can read what the 2010 Prize in Economic Sciences is about in a popular version for the larger audience (related, a "speed read" version; even an "illustrated" version); you can also go on and inspect the more detailed, technical, version with further references (or go through the concise three-page version by Rob Shimer); see also an interview with Per Krussell describing the work of the 2010 Econ Nobel Laureates; watch a documentary about the lives and work of the three Laureates; a video interview of the three Econ Prize winners with Adam Smith (including opinions about teaching and training their graduate students, I thought that was very informative!); watch the Econ Prize lectures of Mortensen, Diamond, Pissarides; the Banquet Speech of Dale (on behalf of the three Economics Prize winners) etc.

"Ecoutez, bravo, 1-0 pour l’Italie"

Quels que soient ses problèmes, ce n'est pas le sens de l'humour qui lui manque: sans doute le chef d'État le plus drôle de la planète!

Merci, Martine!

Econlinks: Of (visual) art, old and new

• The third and the seventh: imagination materialized or Alex Roman's computer generated art. Via Michael Nielsen. 
• Staying in CG: meet Julia Map, of Google ancestry. And since we're here, read how the fractals changed the world --which was in a way also part of the obituary to Father Fractal, Benoit Mandelbrot, who passed away a couple of months ago; see a better one from the Economist. My own brief memories of him: I met Mandelbrot at a workshop on economics with heterogenous agents (WEHIA) at Essex University, back in 2005. Before his keynote speech, he introduced himself in the following very humorous way (paraphrasing): "Hi, I am Benoit Mandelbrot. And I am not dead yet. [pause] I tell you that because I have just met somebody in the corridor who told me: 'OMG, you are Benoit Mandelbrot. I thought you were dead for a long time now' ". 
• Meet Jeremy Mayer, tamer of the typewriter. "I disassemble typewriters and then reassemble them into full-scale, anatomically correct human figures. I do not solder, weld, or glue these assemblages together- the process is entirely cold assembly. I do not introduce any part to the assemblage that did not come from a typewriter". 
• Back to the traditional, but impressively executed: meet Camille Seaman. From the "Last Iceberg series" statement: "Nick Cave once sang, 'All things move toward their end.' Icebergs give the impression of doing just that, in their individual way much as humans do; they have been created of unique conditions and shaped by their environments to live a brief life in a manner solely their own. Some go the distance traveling for many years slowly being eroded by time and the elements; others get snagged on the rocks and are whittled away by persistent currents. Still others dramatically collapse in fits of passion and fury."
• On the art of fiction: interview with Michel Houllebecq, born provocateur. Hat tip MR.
• And yes, she is back online (hopefully she is now here to stay)! Meet my friend Anna, talented photographer and undercover economist. 

Econlinks: On crises. And opportunities

• Crises and opportunities in Balkan science policy (start, more). A word of caution for my Romanian pals, among whom a new risk of self-denying optimism-- expected to turn into the usual complacency-- appears contagious: con calma, this is at best a mediocre start (though, granted, a start it is). Not to mention that before reaching (competing with?) the West, the East needs to tackle (be inspired by?) the more (and increasingly so) academically attractive South.
• ...in which it is revealed that crises may hide huge opportunities. Earlier on the Kseniya phenomenon.
• A wealth of economic ideas? Taxing prostitution in the Netherlands and witchcraft in Romania.  Good luck.
• Chess crisis: what did they give Magnus to drink/smoke in Holland?! In words.
• Opportunities? Best predictors of the number of heterosexual sex partners.
• Somebody save Maastricht, tourists will desert it. 
• In praise of reading and fiction: Mario Vargas Llosa like no other. Also, hopes that the Literature Nobel Committee has finally decided to do a Nobel Committee job.

Chicago Michelin Stars: The Unfinished Business

While the preamble looked rather promising, the Chicago Michelin stars seem to have been awarded in a hurry (in fact: the results were already out yesterday, a day before expected) and the upshot is at best sloppy... Do not get me wrong, many places on this list were expected to be there. If you look at my forecast in the earlier blogpost, I actually predicted correctly 10 of the 23 places eventually awarded stars, while nominating only 5 eateries that eventually failed to get at least one Michelin star. Moreover, among the places I foresaw as "obvious" choices, I had only one that was not rewarded with at least one star. And therein lies precisely the biggest problem with the selection of the Michelin undercover inspectors (who, no doubt, work hard, but my feeling is they worked less hard than their NYC counterparts-- 9th bullet point).

But to the point: I fail to understand how a place like Moto did not get at least one star. While my in depth review of that place (with inter alia, photos of most of my 20 grand course tasting dinner menu) will follow at some point, it should suffice to say that in my view that place ought to be higher ranked than (the otherwise impressive) Michael Mina's in San Francisco, which is a 2-star Michelin, or so it was when I checked it out, as now it appears to have been kicked out of the San Francisco Michelin starred list.... And while the variance in quality among the dishes in that 20 grand course was indeed higher than at Noma's (but then again, I leave it up to you to name a place where that assessment would not be true today, when Rene Redzepi simply rules above all: the fact that Noma still has only 2 Michelin stars might be the very proof of Michelin continuing with... well, slightly different standards), quality was still superior to that of most places I have tried earlier, plus the food was extremely-- I do actually mean extremely-- daring and creative. But I guess these are features that American-trained Michelin inspectors failed to notice? Anyhow, to add to potential mishaps, L2O (disclaimer: did not try it yet, some of my sources loved it, but others did not find anything special to it despite several trials) managed to collect the 3 stars grand prix (I thought of them more of a potential 1 star candidate), and that despite their top chef recently leaving them, action which is normally associated in the Michelin world with losing one or even more stars. Mais enfin, obviously I have now placed L2O very high on my priority list, so that I check it out for myself: I'll report then back to you on this :-).

The other huge problem, already anticipated in the earlier post on the Michelin-in-Chicago, is that places like Avec and Sweets and Savories failed to be recognized even in the Bib Gourmand category (with particularly Avec a no-nonsense candidate even for 1 star). Avec is by all means one of the best eateries in this city, while Sweets and Savories is in my view the best quality-price ratio I have tried as yet (better than The Girl and The Goat, or Hopleaf, or the other Chicago Bib Gourmands I have tried to date, as to that particular dimension). While I did not necessarily think these two places should be within the starred Michelin category, failing to recognize them even in the Bib Gourmand (while, truth be told, adding some places among the 46 in that category that some of my gourmand sources find at least odd...) raises big question marks.

All in all, too many 3- and 2- Michelin stars among the recognized eateries, missing at least one potential 1- or 2- star place, and further ignoring at least two noteworthy Bib Gourmand restaurants. That is bad enough, even for a very first assessment of the Chicago culinary scene.



Update: Jean-Luc Naret on the Chicago Michelin stars. Some things above find an explanation (the ranking was finalized already in September; Avec has been closed for a great while; Laurent Gras might return?) but I am not satisfied.

Econlinks: Kamelåså et al

• 
  
  Before I come up with my Econ Nobel forecast -- a week to go, stay tuned-- let us take a look to the 2010 Nobel Ig prizes related to Economics. The Economics Ig Nobel itself is perhaps not very unexpected this year--though not very creative either (I wonder whether Oliver Stone is behind this too; his latest movie gets pretty mediocre reviews-- IMDb, RottenTomatoes-- despite all the hype). The "Management" Nobel Ig reads much better (but I still need to check out that paper): "Alessandro Pluchino, Andrea Rapisarda, and Cesare Garofalo of the University of Catania, Italy, for demonstrating mathematically that organizations would become more efficient if they promoted people at random. REFERENCE: “The Peter Principle Revisited: A Computational Study,” Alessandro Pluchino, Andrea Rapisarda, and Cesare Garofalo, Physica A, vol. 389, no. 3, February 2010, pp. 467-72."

• Mankiw's excellent advice for all new college freshmen. Do learn some Economics, Statistics, and Finance, (ok, even Psychology, though this is second order) for your own sake... Couldn't have phrased it better.

• 
  
  He rocks no matter the topic, or context. Colbert for President (Stewart can make an ideal Vice-President).

• 
  
  What would happen if Lars von Trier were in charge with marketing Denmark. Not that the real (at least, intended, later withdrawn) ad  was much smarter. (With thanks to Fred for the links). If you ask me, the Danes should hire these Norvegians for the perfect branding job. Anyhow, good or bad PR, I am heading that way (momentarily with a headache in Schiphol's Crown Lounge). Inter alia, training a bit for future chilly times in Chicago.

• 
  
  And finally, keeping it in Scandinavian context: Magnus beat the world. And he got a date with Liv Taylor: I'd say that's worth the effort. See also his interview on the Pauw and Witteman Dutch TV show, before the world match (partly in Dutch, but you'll manage).



Econlinks: Of Maths, Efficiency, and Language

• Terry Tao brief and informative on the 2010 Fields medalists (Le Monde est aussi très heureux et honoré pour Ngo et Villani, "deux facettes de l'école mathématique française"). Read also Tao's intro to the winners of the Nevanlinna, Gauss and Chern prizes.
  

• Interesting interview of Michael Nielsen with Cameron Neylon on practical steps towards open science (and, as it turns out, on useful advice beyond that)
  

• Gelman (channelling Palko) on 'teaching yourself Mathematics' (that was better than his acting somewhat confused and perhaps too much as a-- his own--discipline zealot in commenting on Banerjee and Duflo's review)
  

• Landsburg on efficiency and honest goal stating in policy analysis (see also Reinhardt's NYT column that started Landsburg). And another critical instance/application of (in)efficiency, via Barro.
  

• Languages shaping the way we think (and why I would have no chances with geographic idioms like Guugu Yimithirr or truth-revealing languages like Matses)
  

• Last but not least: two ok obituaries for Tony Judt, one in The Economist and one in the NYRB.
  

Up in the air

It is great, truly great. In fact IMDb and RottenTomatoes do not give it sufficient credit. I was told I would love it, by people who know me, but I didn't just love it: I adored it. One of my favourite scenes is also one of the most brilliant dialogues/pick-up strategies, on screen and beyond. It is a shame the movie did not win any Oscars, given the six (only!) nominations it received. "Superlative" is not doing enough justice to the acting performances of George Clooney, Vera Farmiga or Anna Kendrick, with the film also an example of perfect direction and screenplay by Jason Reitman & co. It belongs right there, in my top 5 all-time favourites.

To top it all, I've seen "Up in the air" just the proper way, up in the air-- during my Chicago-Amsterdam trip yesterday. And, obviously, I write this post from Schiphol's KLM lounge, soon to be up in the air again, this time to Shanghai. "Bingo. Asians."

Sunday night econlinks: Interviews edition

• Sequence of very welcome interviews by John Cassidy with several members of the “Chicago School”, about the status of Economics in the context of the current crisis, the Chicago School nowadays, the Milton Friedman legacy etc: interview with Richard Posner; Eugene Fama; John Cochrane; Gary Becker; Jim Heckman; Kevin Murphy; Raghuram Rajan; and Richard Thaler (my favourite interviews here are the ones with Murphy, Heckman, and Rajan).

• Interesting interview with urban and environmental economist Matthew Kahn on green cities, environmental Kuznets curves, demographics in major cities, policies to attract and retain a skilled population base etc. Here’s one of the parts I like most: “I'm an honest man. I think it's important to know what you don't know. When you know that you don't know something, the answer is to experiment! “ Valid beyond this context.

• A chat with Greg Mankiw, Harvard professor, successful Economics blogger, former CEA head, and a total family guy.

• December ’09 video interview with John Nash; inter alia briefly touching on inaccuracies in A Beautiful Mind , childhood, home encyclopedias, meeting his wife, asking refugee status in Europe, willingness to still do some academic work etc.

• Interview with entrepreneur Peter Thiel, among other things cofounder of Paypal, and first investor in Facebook. Though confused about a few specific issues, his overall idea makes a lot of sense.

• Short interview with Yoram Bauman, the one and only stand-up Economist, on the need for humor and cartoon textbooks in Economics. We love this quote: “I put my left hand on the small of her back, I put my right hand on the curve of her hip, I put my invisible hand on her thigh”

• And finally, a very special simultaneous interview/debate (or, rather: rap) with John Maynard Keynes and Friedrich August von Hayek, on recipes for dealing with the current, or any other, economic crisis. The lyrics, if you want to learn this by heart.

Weekend econlinks

• Acemoglu on how nations can get rich: "Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments"

• Blogossary. With some definitions completely redundant.

• Carlsen is finally right where he should be. For now in Blitz.

• Diploma mills and degree mills. Romania has plenty, Denmark at least one very famous case (though Wikipedia is too slow for that).

• Caballero on sudden financial arrest. I don't agree with everything: the moral hazard is not merely fuzzy reasoning in the context.

• What's up with all the vampire hype: Tyler Cowen's answers. If you want the perspective of a vampire on why vampires are popular, you can meet me in private.

• "If you interact with things in your life, everything is constantly changing. And if nothing changes, you're an idiot." And many other smart thoughts from Umberto Eco (Part 1, Part 2).

• The Journal of Virtual Worlds Research: it exists (and seemingly functions well). Reminds me that I still have to read Edward Castronova's "Synthetic Worlds"...

• Undercover Michelin inspector. Clearly not such a flashy job as Anton Ego's, but if they were to consider hiring part-time, amateur (willing to heavily train on-the-job, though) food inspectors, I would be very interested... :-)

• Very little time left for you to trade Romanian Potential President stock. You have to act NOW! :-)

On Noncommutative Geometry, String Theory, and the EU vs. US academe

All this in a 2005 interview with Alain Connes, in Iran (initial link to the PDF of the interview via Tyler Cowen, on MR).

First, I think this is a very welcome, very open interview (several questions/comments are just great, congrats to the interviewers!) and it is extremely interesting to see the opinion of this great mathematician (inter alia, Fields Medalist in 1982) on a wide range of topics. The pros: I completely agree with Connes's view on the distinct (ir)relevance of String Theory for Mathematics and respectively, Physics. I also like his (humorous) detachment from being considered the guru of NCG (of which unfortunately I know currently epsilon, albeit once I was almost sure this is what I wanted to do...) and from the tendency of always looking for / looking up to the one mastermind, in general, in any (sub)discipline. So no more on those, read for yourselves in the transcript of the interview. What I don't quite agree with is summarized below:

• resources (money) in research are not important (Connes's context has to do with the large interest/funding in Bio-Mathematics; he actually says "nothing", which I take as far stronger than "not important":-)): to the extent that it shapes incentives, I think it is actually very important. Intrinsic motivation is (the most) relevant, but it is not everything. The marginal (very able-- let us simplify) scientist can be moved into one direction or another by means of designing proper (or improper; but then again, who is to decide what is proper/improper in the context: I think we ought to take the view that lots of money is being thrown in one direction, because there is a lot of interest in that particular direction) extrinsic rewards. That being said, I personally (also) think there are a lot more interesting things in/to Maths than Biomaths :-).
• the European academic system is better than the US one. Hmmm, this is an endless debate and, as always, the truth is probably somewhere in the middle. Inter alia, it goes back to whether you need/want tenure or not in the academe (see for instance such a debate I've earlier linked to, especially within Economics) and to what goals you expect researchers to meet. And this also goes beyond one or another discipline, although it is perhaps interesting to discuss it indeed in the light of fundamental Mathematics, given its very abstract nature. Now, Connes believes that a system such as the French CNRS (which possibly is in the process of changing since 2005, when this interview took place) is perfect for mathematicians working on extremely complicated issues, that take years and years and years, since they are insulated from being subjected to those "n publications" requirement per year and in general from the eternal harassment of frequently showing how you compare to your peers, something specific to the top US institutions (Connes dismisses that the US places are ultimately inherently better in producing top scientists, because they get all the top European people-- not (entirely) true and to a great extent working eventually against his thesis, e.g. need to justify preferences of those very high European achievers for the US places, but let us not get also into that). The potential problem (sacrifice), as acknowledged by Connes, is the cost of such a practice, given that a lot of people might end up not producing anything and that the vast majority of them will be very far from getting Fields Medals or similar recognition among their peers... I say that the main problem is who bears that cost, namely the taxpayers here; and the public (not all of them having the same goals as Connes or as the specific, minority, group of the scientists, in general) is justified in knowing and assessing (whenever it so pleases) where its money is going and what precisely it pays for (if the funding is private, all this discussion has a completely different flavour-- remark that the US top academic places are privately funded, while all European examples Connes mentiones are public institutions; in my view, this again tips the balance towards the US academia). Related, but extremely surprising, Connes seems to be nostalgic after the Soviet Union academic system, but I think he deeply confuses things-- anyway, let us just say for the sake of this brief post that, fortunately, France was never quite like the Soviet Union, despite its tendency to lean extreme left, particularly within its academe... As for the claim that the Soviets would have been far ahead US and everybody else, if their system remained in place, I guess we'll never know (though I have opposite priors). And I think it is better we don't... So I am rather dissapointed that one of my idols in Mathematics has/had (this was '05) such, hmm: uninformed, views. But then again, I've always thought Economics (Not Politics. Politics is just a surface, not relevant in the long run, ultimately all boils down to Economics-- really!) is far less intuitive than Mathematics or Theoretical Physics :-).
  

I am sure one can go on and on, but I trust the main ideas are all outlined above (read also between the lines).

Weekend Econlinks

• Science Q&A with the female Nobelists this year.

• EMH: it really ain't dead. (via Mankiw)

• Harvard's financial report for 2009. And some of the (dire) consequences.

• Head hunting for a (younger than Mas-Colell...legal requirement, apparently) distinguished scientist to be the European Research Council's new Director.

• the NAJ Ain't a Journal of Economics. I can't understand why I find about it only now, this looks extremely interesting (via cheaptalk).

• High time for the Viking to break through! And a funny interview after the Nanjing show off. (via Susan Polgar)

• Levitt did pretty well on The Daily Show (he also did well on the Colbert Report a great while ago). Though I am rather puzzled by his statement "I am not a scientist"; I wonder whether he thinks that a. Economics is not a science, or else b. what he does is not Economics..., or else...?

• Landsburg is blogging. And he's got a couple of great posts already. Here's one of them, on Dawkins, and the origins of complexity.

• Cancer progress might be completely different than known so far.

• Polygamy preferred from any angle. Reminds me of Becker's arguments a while ago (2nd bullet point)-- by the way, they now made a book of the Becker-Posner blogposts.

• The death of the book as we knew it!/? And some nostalgia after book browsing.

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...
  

Econlinks

• 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 professors who rock Harvard.

• Bucharest in 1961 . Plus photos from all UNESCO World Heritage sites in Romania (both via RomAlien)

• An analysis of journal submission strategies. I didn't have the time to follow in detail their analysis, but the conclusion is sensible:

"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. "

Econlinks

• Always wise thoughts from the one and only Kevin Murphy . If for some reason you haven't heard of him yet, all you need to know is that Murphy holds comparative advantage in all forms of production.

• A quite old, but still interesting and revealing article on Sergey Brin. I like this bit from Eric Schmidt: "Evil is whatever Sergey says is evil".

• Ambition-adjusted (Economics) journal ranking. Some (my) highlights: 1. No matter how you measure it, top 5 is top 5 and has been virtually the same over many years (and, caveat lector, it is certainly not a top 6... or more; in particular maybe somebody from the Finance group(s) at my former Tinbergen Institute reads this and eliminates the Journal of Finance from their current top "5+1": I think it is the only place in the world where they have recently altered the very top by adding this extra field journal, though they would be happy to confirm that their best papers are submitted always to one of the other top 5's...); 2. JEcGrowth, Review of Econ Dynamics and JEEA are the very strong newcomers and they continue to go up the rankings; 3. EJ is a champion of self-citations; 4. Some formerly very prestigious journals recently lost quite some ground, examples being JHumResources, Journal of Credit, Money and Banking, JDynControl etc.

• I concur: this would be by far the best way to organize poster sessions. Particularly if they are in Economics or Social Sciences in general...

• An interesting NewYorker article on Iran's trial-and-error Economics policies.

• Italy outsourcing peer-review to NIH: it could potentially be a solution also for other countries where finding decent referees for grant proposals etc. has been notoriously difficult (think Romania and the like). Via Liviu Giosan, on Ad Astra.

• Sardines (and Sardinistas). Try them grilled with garlic and parsley, indeed!

• The imp of the perverse (or How to Think, Say, or Do Precisely the Worst Thing for Any Occasion)

• "The secret to The Economist’s success is not its brilliance, or its hauteur, or its typeface. The writing in Time and Newsweek may be every bit as smart, as assured, as the writing in The Economist. But neither one feels like the only magazine you need to read. You may like the new Time and Newsweek. But you must—or at least, brilliant marketing has convinced you that you must—subscribe to The Economist. " More about the Economics of The Economist.

Econlinks today

• An older, but still very actual interview with Charles Plott on the value of experimental methods in Economics

• S. Pellegrino's World's 50 Best Restaurants for 2008. I plan to try number 10 (Noma, Copenhagen, the only Danish restaurant on the list) this year.

• I am not sure how good of a Vice-President he'd eventually be, but he does get most of his economics right. Which is really impressive for somebody aspiring to be top politician...

• The elusive link between trade and wage inequality. Inequality which is there and rising. Not that this is necessarily bad (1st bullet point). Or that anybody really cares about it.

Econlinks for 18-02-'08

• An excellent (& extensive) interview with Susan Athey, the most recent winner of the John Bates Clark medal. Here's one of the best parts:
  
  

  Finding the applications that resonate with the students or the population in general and then showing them how a little bit of structured thinking can substantially improve their understanding — I think that’s where you get the power of economics. I’m still amazed that in the business world how having a coherent and structured way of approaching problems can allow someone like me to walk into an industry meeting and talk to people who are brilliant people managing large companies and still have unique insights for them. That’s because I have these really powerful tools at my disposal. Economics allows you to think several layers deeper. Without that structure, you just get lost in a muddle.

  
  

• Greg Mankiw rules again with his "Principles of Economics" class at Harvard. Probably Mankiw's is the most popular class of Economics in the world; the Economics world should in that case acknowledge Mankiw as "THE Economics Teacher".
  

• Here's Steven Levitt answering (some of) the criticism of John DiNardo. I've mentioned DiNardo's criticism here (1st bullet point). DiNardo might have been bored indeed :-), but Levitt carefully selects which points to tackle in his reply; he eventually addresses (true, very well) some of the relatively minor ones and leaves the gist of the critique unanswered...
  

• This IS NOT my reason for not using Facebook and declining every invitation to do so (don't even bother). I think the author of this text in The Guardian has little comprehension of economics, freedom to choose and the like, not to mention that at times he borders on paranoia. As long as users are perfectly informed of their rights and obligations, there is nothing to do with, e.g., invasion of privacy, to choose randomly from the 'sin list' of the article linked above. My rationale is much simpler: my opportunity costs would outweigh any eventual benefits from being active on Facebook or related 'social networking' sites. I however see them perfectly justified and a great business idea.

Econlinks for 06-02-'08

• Why we kiss, in case you were wondering... Not much to do with economics per se, unless you want to make the link to things some people consider related, such as when to say "I love you" (4th bullet point):-). And come to think of that, let's travel one year back in time and (re)consider the (neuro)science of love. Finally, keeping it assorted, you might also want to (re)check why you (don't) have sex (4th bullet point).

• 'Economics according to Google': a very interesting interview with Hal Varian, the currrent Chief Economist at Google. The interview was taken just a few days after Varian took over his new (full-time) job. Retain Varian's prediction: "I think marketing is the new finance".

• Sell illegal US immigrants the right to stay: wise thoughts (far too wise for any of the current US politicians) from Gary Becker; read also his former posts related to this topic: here, here and here).

• For those of you in any way interested in computing power, here's the most recent top 500 list of (commercially available) supercomputers (Nov '07), with all kinds of statistics available. Here's a PDF on the interpretation of the Top500 data.

Econlinks for 20-01-'08

• I made a mistake last time when I mentioned Gelman and Cai's recent research on whether the US political parties would gain from shifting their position on the economic axis, focusing on the Kerry vs. Bush former election. In the paper they did have more electoral dimensions (they analysed the case with one, two and three dimensions), which makes it very very interesting, so my comment concerning analysis done on solely the economic dimension was not very sound :-). But see below the most interesting parts, from my point of view, of that study. Self-explanatory. I think they both confirm and complement one of the 5 myths of ballot-box behavior in Bryan Caplan's recent short article, which I mentioned here.

"Democrat's views of Bush's position on social issues is negatively predicted by self-perceptions on economic issues, with self-perception on social issues not coming into the equation at all. In contrast, Democrats' views of Kerry's positions on social issues are entirely predicted by self-perceptions on social issues. Now we look at the coefficients for Republican respondents: to predict their views of Bush's position on social issues, only their self-perception on social issues is relevant, but when predicting Kerry's position on social issues, only their self-perception on economics is relevant. To summarize: voters appear to characterize their own party's nominee's positions in a way consistent with their self-perception on each issue dimension. But their views of the other party's nominee, in both dimensions, is predicted (with a negative coefficient) solely based on self-perception of economics"

and

"We also see that the coefficients for idelogical distance are greater for Democrats than for Republicans, which is consistent with the idea that Democrats are more diverse in their political preferences (so that conservative Democrats are more likely to vote for Bush than liberal Republicans were to vote for Kerry)."

• Read Brian Snowdon's excellent interview with Oded Galor, the artisan of the unified theory of economic growth. This (very informative!) article takes you very briefly through Galor's research in this context; for the details you should start reading his many papers in the area (taking into account that Oded Galor comes up with two-three new papers before you finish reading one of his older ones :-)).

• the complete index of the 'markets-in-everything' section on Marginal Revolution, so far. Now you know where from to get your exotic entrepreneurship ideas.

• Romania apparently has the same total GDP as Delaware. Now, if you recall that Delaware has less than 1 million inhabitans, while Romania counts over 22 million, you have an idea where we stand in terms of the more appropriate GDP-per-capita comparison :-).

• Harford, Rodrik and Cowen discuss further--- here's the whole summary of that by Tyler Cowen on MR-- on what do we owe the losers from free trade, with the initial article by Landsburg (which I mentioned as last bullet point here). I think Cowen concludes this nicely with "Tax the pollution, not the trade".