Tuesday , July 23 2019
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Tyler Cowen

Tyler Cowen

Tyler Cowen is an American economist, academic, and writer. He occupies the Holbert C. Harris Chair of economics as a professor at George Mason University and is co-author, with Alex Tabarrok, of the popular economics blog Marginal Revolution. Cowen and Tabarrok have also ventured into online education by starting Marginal Revolution University. He currently writes the "Economic Scene" column for the New York Times, and he also writes for such publications as The New Republic, the Wall Street Journal, Forbes, Newsweek, and the Wilson Quarterly.

Articles by Tyler Cowen

Human Capitalists

7 hours ago

That is the title of a new and important paper by Andrea L. Eisfeldt, Antonio Falato, and Mindy Z. Xiaolan.  It seems that perhaps the share of labor in gdp has not fallen much after all:
The widespread and growing practice of equity-based compensation has transformed high-skilled labor from a pure labor input into a class of “human capitalists”. We show that high-skilled labor income in the form of equity claims to firms’ future dividends and capital gains has dramatically increased since the 1980s. Indeed, in recent years, equity-based compensation represents almost 45% of total compensation to high-skilled labor. Ignoring such income results in incorrect measurement of the returns to high-skilled labor, with important implications for macroeconomics. Including equity-based compensation

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What I’ve been reading

10 hours ago

1. Christopher Tyerman, The World of the Crusades: An Illustrated History.  The best and most engrossing history of the crusades I have read.  By the way, the “children’s crusade” probably didn’t have that much to do with children.  The periodic topic-specific two-page interludes are especially good.
2. Tobias Straumann, 1931: Debt, Crisis, and the Rise of Hitler covers a critical episode in European history, and one which has not entirely faded into irrelevance.  The author is a financial historian rather than an economist, so think of this book as scratching your history itch, in any case recommended.
3. Jim Auchmutey, Smokelore: A Short History of Barbecue in America is the most current of the best histories of barbecue and it is more bullish on the barbecue future than most

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Monday assorted links

19 hours ago

1. It is quite hard to infer emotions from faces.
2. “What’s deoxyribonucleotide in sign language?”
3. “…an arguably large number of Nobel laureates in economics had as a dissertation adviser another laureate.”
4. The Notre Dame fire revives the demand for skilled stone carvers.
5. Should children be restricted on campus?
6. Legal marijuana is helping the black market.
The post Monday assorted links appeared first on Marginal REVOLUTION.

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A carbon tax in a Hotelling model

22 hours ago

It is rare that anyone wishes to broach this general topic, on either side of the debate.  This is from a new working paper by Geoffrey Heal and Wolfam Schlenker:
We highlight important dynamic aspects of a global carbon tax, which will reallocate consumption through time: some of the initial reduction in consumption will be offset through higher consumption later on. Only reserves with high enough extraction cost will be priced out of the market. Using data from a large proprietary database of field-level oil data, we show that carbon prices even as high as 200 dollars per ton of CO2 will only reduce cumulative emissions from oil by 4% as the supply curve is very steep for high oil prices and few reserves drop out. The supply curve flattens out for lower price, and the effect of an

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The threat is stronger than the execution, installment #437

1 day ago

A Pennsylvania school district is warning that children could end up in foster care if their parents do not pay overdue school lunch bills. The letters sent recently to about 1,000 parents in Wyoming Valley West School District have led to complaints from parents and a stern rebuke from Luzerne County child welfare authorities.
The district says that it is trying to collect more than $20,000, and that other methods to get parents to pay have not been successful. Four parents owe at least $450 apiece.
And worse yet:
The district’s federal programs director, Joseph Muth, told WNEP-TV the district had considered serving peanut butter and jelly sandwiches to students with delinquent accounts but received legal advice warning against it.
When I was a kid, we considered peanut butter and jelly

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My favorite things New Hampshire

1 day ago

1. Musician.  I don’t love Steve Tyler/Aerosmith, so what am I left with?
2. Author: I find John Irving unreadable, so does it come down to Russell Banks?  Who else is there?  Salinger lived in New Hampshire for a long time, so I’ll pick him, though it is also pretty far from my favorite.  Here is my Catcher in the Rye review.
3. Sculptor: August Saint-Gaudens.
“Law Supported by Power and Love”

 
4. Adam Sandler movie: The Waterboy, Happy Gilmore.
5. Poet: Robert Frost, who seems to be clear winner for the whole state.  There is a scholastic version of Frost which is quite dull, don’t be put off if that is all you know of him.
6. Movie director: Brian DePalma, Dressed to Kill and Mission to Mars being my favorites.
7. Painter: Maxfield Parrish.  I feel I’m being forced into many of these

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Sunday assorted links

2 days ago

1. Markets in everything even in the age of Trump expertise matters.
2. Orange County’s New Age Crystal Cathedral becomes a Catholic church.
3. How might Libra evolve in response to regulatory demands.
4. Most recurring word on each country’s Wikipedia page.
5. Interview with Colson Whitehead.
6. Apple disruption.
7. Why no #MeToo for domestic violence?
The post Sunday assorted links appeared first on Marginal REVOLUTION.

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Are the Contents of International Treaties Copied and Pasted?

2 days ago

Most accounts of international negotiations suggest that global agreements are individually crafted and distinct, while some emerging scholarship suggests a heavy reliance on models and templates. In this research, we present a comprehensive test of whether new international treaties are heavily copied and pasted from past ones. We specify several reasons to expect widespread copying and pasting, and argue that both the most and least powerful countries should be most likely to do so. Using text analysis to examine several hundred preferential trade agreements (PTAs), we reveal that most PTAs copy a sizable majority of their content word for word from an earlier agreement. At least one hundred PTAs take 80 percent or more of their contents directly from a single, existing treaty—with many

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*Escape from Rome*

2 days ago

The author is Walter Scheidel and the subtitle is The Failure of Empire and the Road to Prosperity.  Imagine a whole book on what he calls “the second Great Divergence,” namely that China developed a large, relatively unified hegemonic state early on, while Europe remained (mostly) politically fragmented.
Have you ever wondered why the Roman empire did not, in some manner, re-form in the Western part of Europe?  And how did it matter that China had a tradition of having to defend against the steppe while Europe did not?  Here is one brief excerpt:
…East Asia was characterized by a unipolar or hegemonic political system for 68 percent of the years between 220 BCE and 1875.  This pattern presents a stark contrast to the prevalence of a balanced system in Europe for 98 percent of the years

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Saturday assorted links

3 days ago

1. The culture that is West Palm Beach: “The loop of “Baby Shark” and “Raining Tacos” is a temporary fix to keep homeless people off the patio.”
2. Federal Reserve comic books now on-line.
3. Why are women’s voices deeper today?
4. Alien beauty subverts world of fashion.
5. Could the Apollo moon landing be duplicated today?
6. “We are granting early access to our India local data series: 500k villages, 8000 towns, 4000 constituencies. 25 years of admin data on firms, public goods, consumption, labor, elections, demographics, forest cover, etc.. All hyperlocal.”  Link here.
The post Saturday assorted links appeared first on Marginal REVOLUTION.

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Why zero temporal discounting *within* a life is less plausible than across generations

3 days ago

For an individual there is both cardinal Benthamite utilitarianism (“utils”) and preference utilitarianism.  The two sometimes conflict (would you take a pill that gave you joy when you saw suffering?), and a plausible consequentialist theory attaches some weight to both.
Most of the arguments for zero discounting of utility apply to the cardinal measure.  Don’t put off going to the dentist just because you don’t like pain — when the pain finally arrives, it will be no less real.
But now shift your attention to the preference utilitarianism.  Let’s say a person had a strong preference that “the Knicks win an NBA title in 2022,” deciding that it isn’t nearly good enough for the Knicks to win that title in 2030.  That is a kind of positive time preference.  Arguably it is ungrounded and

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From the comments, what if big business hated your family?

3 days ago

Suppose Big Business did hate your family, what would that look like?
Would it mean adopting a working culture that made it ever harder to rise to power within it while also having said family? Would it require those with career ambitions to geographically abandon extended family and to live in areas notoriously difficult for raising families? Would it mean requiring long delays on family formation while you got credentialed, worked with little remuneration while getting your foot in the door, and then place huge amounts of time and effort on career growth rather than investing in your family? Does corporate culture act like it hates your family?
Would it mean selling products which have strong correlations with family strife and dissolution? Would it market products known to be

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Inventor CEOs

4 days ago

One in five U.S. high-technology firms are led by CEOs with hands-on innovation experience as inventors. Firms led by “Inventor CEOs” are associated with higher quality innovation, especially when the CEO is a high-impact inventor. During an Inventor CEO’s tenure, firms file a greater number of patents and more valuable patents in technology classes where the CEO’s hands-on experience lies. Utilizing plausibly exogenous CEO turnovers to address the matching of CEOs to firms suggests these effects are causal. The results can be explained by an Inventor CEO’s superior ability to evaluate, select, and execute innovative investment projects related to their own hands-on experience.
That is from Emdad Islam & Jason Zein, forthcoming in the Journal of Financial Economics, via the excellent Kevin

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Friday assorted links

4 days ago

1. Taking Malthus seriously.
2. The most played song on UK radio?  Snow Patrol, “Chasing Cars.”
3. The culture that is American disability.
4. Why is Roman cement so durable?
5. How often do dictators have positive economic effects?
6. Podcast with Julia Lovell on Mao and Maoism.
The post Friday assorted links appeared first on Marginal REVOLUTION.

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Which of these claims is false?

4 days ago

The Democratic-controlled House just voted to abolish the “Cadillac tax” on employer-supplied health plans.
The Independent Payments Advisory Board no longer exists, having been abolished with support from both parties.
In the public option for Democratic-controlled Washington State, reimbursement rates were set at up to 160 percent of Medicare levels.
Single-payer health care will save America a great amount of money.
The post Which of these claims is false? appeared first on Marginal REVOLUTION.

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Should Alaska cut state university funding by 41 percent?

4 days ago

That is what they have done, in order to boost the Permanent Fund Dividend payments to the citizenry.  Here is the closing segment from my Bloomberg column:
I see Alaska’s decision as reflecting two broader trends in the U.S. First, a lot of small educational institutions are closing, consolidating or drastically cutting back, most of all in out-of-the-way places. Second, regions are diverging, both economically and culturally. More and more educated people are moving to the major cities.
You may have mixed or negative feelings about these two developments. Taken together, however, they could lead to a bunch of state schools on the chopping block. I suppose it’s fine to complain about this outcome, but far better would be to address the underlying trends.
There are things government could

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Rhino bond markets in everything

5 days ago

Conservationists have started marketing a five-year rhino bond, which bankers say will be the world’s first financial instrument dedicated to protecting a species.
Investors in the $50m bond will be paid back their capital and a coupon if African black rhino populations in five sites across Kenya and South Africa increase over five years. The yield will vary depending on changes in the rhino population, which has fallen rapidly since the 1970s.
The bond is likely to have different categories of investment, with some investors taking a “first loss” position. If rhino numbers drop, those investors will lose their money depending on the scale of the decline and the terms of their investment, while investors in other categories will be repaid.
That is from John Aglionby at the FT.
The post

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Thursday assorted links

5 days ago

1. They think these are the 25 most important contemporary artworks (NYT).  Someone is in trouble, and I do not think it is me.  I will endorse Kara Walker, however.
2. “…irrelevant non-mathematical knowledge interferes with the identification of basic, single-step solutions to arithmetic word problems, even among experts who have supposedly mastered abstract, context-independent reasoning.”
3. Full video of the new Peter Thiel talk.  And Eric Weinstein and Peter Thiel podcast.
4. Is the restaurant revolution over?
5. Interview with Enrico Moretti.
6. Where do self-driving vehicles stand now? (NYT)
7. Matt Levine on Libra.
The post Thursday assorted links appeared first on Marginal REVOLUTION.

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Bryan Caplan on Spain

5 days ago

He spent a bunch of weeks there, there are many good observations, here is one of them:
17. Big question: Why is Spain so much richer now than almost any country in Spanish America?  Before you answer with great confidence, ponder this: According to Angus Maddison’s data on per-capita GDP in 1950, Spain was poorer than Argentina, Chile, Mexico, Peru, Uruguay, and Venezuela, and roughly equal to Colombia, Bolivia, Costa Rica, Cuba, Ecuador, Guatemala, and Panama.  This is 11 years after the end of the Spanish Civil War, and Spain of course stayed out of World War II.
And this:
The worst grocery store I saw in Spain offered higher quality, more variety, and lower prices than the best grocery store I saw in Denmark, Sweden, or Norway.
Do read the whole thing.
The post Bryan Caplan on Spain

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*The Body: A Guide for Occupants*

5 days ago

That is the title of the new Bill Bryson book, and it delivers in all the ways you would expect a Bryson book to do.  Here is one sample paragraph:
Before penicillin, the closest thing to a wonder drug that existed was Salvarsan, developed by the German immunologist Paul Ehrlich in 1910, but Salvarsan was effective against only a few things, principally syphilis, and had a lot of drawbacks.  For a start, it was made from arsenic, so was toxic, and treatment consisted in injecting roughly a pint of solution into the patient’s arm once a week for fifty weeks or more.  If it wasn’t administered exactly right, fluid could seep into muscle, causing painful and sometimes serious side effects, including the need for amputation.  Doctors who could administer it safely became celebrated.

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EU markets in everything?

5 days ago

I had never heard about this before:
The controversial practice of picking corporate sponsors for the European Union‘s rotating presidency is to continue, despite an outcry from MEPs.
EU countries have been raising eyebrows by doing deals with increasingly controversial multinational corporations during their stints overseeing debates at the EU council.
Romania’s presidency in the first half of 2019 was sponsored by Coca-Cola, with the US drinks giant’s logo plastered over banners and signs at meetings. One council summit in Bucharest featured Coca-Cola branded bean bag chairs, and a fridge of free drinks plastered with statistics about the company’s contribution to the economy.
Other sponsors of the council presidency have included car manufacturers, software companies, and other firms

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Profile of Raj Chetty

6 days ago

By Gareth Cook, interesting and excellent throughout, here is one good bit of many:
For example, the strongest correlation is the number of intact families. The explanation seems obvious: A second parent usually means higher family income as well as more stability, a broader social network, additional emotional support, and many other intangibles. Yet children’s upward mobility was strongly correlated with two-parent families only in the neighborhood, not necessarily in their home. There are so many things the data might be trying to say. Maybe fathers in a neighborhood serve as mentors and role models? Or maybe there is no causal connection at all. Perhaps, for example, places with strong church communities help kids while also fostering strong marriages. The same kinds of questions flow

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My Conversation with Neal Stephenson

6 days ago

Here is the transcript and audio, and here is the CWT summary:

If you want to speculate on the development of tech, no one has a better brain to pick than Neal Stephenson. Across more than a dozen books, he’s created vast story worlds driven by futuristic technologies that have both prophesied and even provoked real-world progress in crypto, social networks, and the creation of the web itself. Though Stephenson insists he’s more often wrong than right, his technical sharpness has even led to a half-joking suggestion that he might be Satoshi Nakamoto, the shadowy creator of bitcoin. His latest novel, Fall; or, Dodge in Hell, involves a more literal sort of brain-picking, exploring what might happen when digitized brains can find a second existence in a virtual afterlife.
So what’s the

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That was then, this is now

6 days ago

Keynote Address 2: (Ritz-Carlton Ballroom)
Tucker Carlson, “Big Business Hates Your Family”
That is from the recent National Conservatism Conference.  Via Ilya.
The post That was then, this is now appeared first on Marginal REVOLUTION.

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Pessoa, *Philosophical Essays*

6 days ago

The half-sceptic speaks like Socrates, I know only that I know nothing.  The whole sceptic speaks like Francisco Sanches: Haud scio me nihil scire, I do not even know if I know nothing.
And:
The end of reason is a weariness of thinking.  Yet reason is so strong that even its weariness is a part of its strength and we dream rationally if we have learnt reason.
Those bits are from this (uneven) volume.
The post Pessoa, *Philosophical Essays* appeared first on Marginal REVOLUTION.

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That was then, this is now

6 days ago

The data came from Facebook:
During Obama’s initial 2008 bid for office, his team had already embraced technology in a greater capacity than any before it, assembling massive email lists and other targeted initiatives that earned Obama historic fundraising tallies. But for 2012, campaign manager Jim Messina wanted to take things even further.
To get there, his staff needed to link what had previously been disjointed databases of voter information (collected by volunteers, pollsters, and other campaign workers) into a single, comprehensive pool unrivaled in detail and scope. Whereas most voter logs used by campaigns often list only names and telephone numbers, Obama’s advanced tool dove into specifics like age, race, district, and voting history: it allowed field workers to rank voters

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Foreign exchange and correspondent banking bleg

6 days ago

What are the best things to read on this topic?  How does it work?  Why is it difficult and expensive (to the extent it is)?  How might current institutions be improved?
I thank you all in advance for your wisdom and counsel.
The post Foreign exchange and correspondent banking bleg appeared first on Marginal REVOLUTION.

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What is the America-China trade war all about?

7 days ago

That is the subject of my latest Bloomberg column, and here are the closing bits:
So that means the trade war is really all about Huawei and Taiwan. If the U.S. persists in trying to eliminate Huawei as a major company, by cutting off its American-supplied inputs and intimidating foreign customers and suppliers for Huawei equipment, it will be difficult for the Chinese to accept. In this case, the reluctance to make a deal will be on the Chinese side, and the structure and relative power of the various American interest groups are not essential to understanding the outcome.
The question, then, is whether the U.S. national security establishment, and in turn Congress (which has been heavily influenced on this question), will accept a compromise on Huawei. Maybe that means no Huawei

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Tuesday assorted links

7 days ago

1. “The results indicate that schools have significant monopsony power over their tenure track faculty.”
2. “The coaching interventions make some students realize that more effort is needed to attain good grades but, rather than working harder, they settle by adjusting grade expectations downwards.”
3. Mulvaney, good piece.
4. AMLO is upending the finance of Mexican government.
5. Why top film schools rejected Steven Spielberg.
6. The role of software in Apollo 11 (WSJ).
The post Tuesday assorted links appeared first on Marginal REVOLUTION.

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The health care public option in Washington state

7 days ago

This excellent Sarah Kliff NYT article is from a few weeks ago, but I missed it the first time around.  Here is the clincher:

“The whole debate was about the rate mechanism,” said Mr. Frockt, the state senator. “With the original bill, with Medicare rates [for the state’s public option], there was strong opposition from all quarters. The insurers, the hospitals, the doctors, everybody.”
Mr. Frockt and his colleagues ultimately raised the fees for the public option up to 160 percent of Medicare rates.
“I don’t think the bill would have passed at Medicare rates,” Mr. Frockt said. “I think having the Medicare-plus rates was crucial to getting the final few votes.”

Nonetheless the piece is interesting throughout, and illustrates some basic dilemmas with health care reform and public options

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