Pursuit of Truthiness

my gut tells me I know economics

Cool Papers!

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The Location of U.S. States’ Overseas Offices, Andrew Cassey

A paper can do many pages of analysis but often the most interesting part is a simple fact that the author did not discover.  In this case, the best part of the paper was learning that the state of Pennsylvania operates 17 overseas offices to promote the exports of Pennsylvania comanies.  40 U.S. states operate at least one office.   No one in Oklahoma can remember whether their offices opened in 2002 or 2003 (I actually went to a presentation on the history of Oklahoma’s Vietnam offices a couple years ago but I also fail to remember when they said it opened).  The most interesting methodological choice in the paper is to ignore Public Choice and assume that bureaucrats, at least in the Departments of Commerce, have the primary goal of minimizing private transactions costs.

Corruption in Iraq: Conflict, Costs and Causes, Frank Gunter

The author was in charge of U.S. anti-corruption efforts in Iraq and the paper is part of an upcoming book on the political economy of Iraq, making this a very cool paper.  On the other hand, listening to the paper was one of the more depressing half-hours of my life.  It seems that corruption is everywhere and every attempt to change it results in spectacular failure.  Even  worse, the corruption is largely of the “dishonest”, wealth-destroying type rather than the “honest” kind where bribed judges stay bought and corruption is a way of getting things done in the face of crushing regulation.  Of the ten or so causes of corruption identified in the literature, Iraq basically has all of them- including a very high rate of cousin marriage (as high as 60% ?!).

Bailouts and Bankruptcies, Y.J.  Yoon.

Another paper where the facts were the interesting part.  In 2005, there were more bankrupcies than divorces in the U.S.  This is hard to see personally because bankruptcy is socially stigmatized yet relatively easy to hide; when people divorce their friends will almost certainly know but no one talks about going bankrupt.  Another interesting fact is that bankruptcies were high in boom years as well as in recessions.  Yoon dismissed my suggestion that rising end-of-life medical costs could be responsible for rising bankruptcies but he didn’t seem to have looked at the data (not that I have either).  It occurs to me that banks and credit card companies have probably done a lot more research into personal bankruptcy than academic economists have.

The Growth of Social Security: Dynamic Effects of Public Choice, Youngshin Kim

This job market paper was not especially interesting but did prove conclusively that some people at George Mason do math and econometrics.

More facts:

Shrimp fishing is the largest US fishing sector (really?) and yet 85% of shrimp consumed in the U.S. is imported.  U.S. shrimpers have to use “turtle excluding devices”.

Spreading the Wealth Around, Greg Mankiw

The paper is online here.

Mankiw examines the philosophical underpinnings of wealth redistribution.  Economics is utilitarian but most people’s moral intuition is not.  Mankiw proposes a “just desserts” theory in which justice means that people are paid the marginal product of their labor (their ‘innate’ MPl, or their MPl with the institutions of a society? “that’s the next paper”).

In the course of the talk, Mankiw claims that he personally is not in the top 1% of the top 1% of the U.S. income distribution.  So I guess even a best selling principles textbook can’t make you $11 million a year.

“Education is like a wonka bar.  A few people find it gave them golden tickets that give them unimaginable opportunities.  But every gets to enjoy the delicious chocolate of knowledge.”

Mankiw identifies a seeming paradox.  Most people think it is good to tax rich Americans at 33% to support poor Americans, but very few (practically just Peter Singer) think it is a good idea to tax the rich of the world (ie almost all Americans) at 33% and redistribute the money to to poor of the world.  Whatever philosophy these redistributionists have, it can’t be utilitarian (again excepting Peter Singer).

Agent-Based Computational Models

One of these was part of a project to build a model of the Pashtun tribal group, who are of great interest to those trying to stabilize Afghanistan and Pakistan.  The actual model was so far unimpressive, but the presentation did feature the sentence “in our model women do not have any purpose except to marry and make children”.

Another model attempted to simulate agents with limited cognitive capacity, who can consider only six strategies at a time.  It was hard for me to evaluate how well the model worked but it did convince me that the field is worth looking in to.

Better Living Through Economics, John Seigfried

Ok, this is a book not a paper.

It tells 12 stories about how economists changed policy for the better.  Most surprising to me was the extent to which economists were involved in ending the military draft.

While talking about matching markets and signalling, Seigfried gave a great quote from Al Roth (who designed the credible signals in the economics job market and who is at Harvard, and is “normally a humble guy”): “We wouldn’t hire anyone who used a signal on us.  We know you would work for us.  Wasting a signal by signalling up shows you are a bad economist.”

Written by James Bailey

April 4, 2010 at 1:40 pm

Posted in Economics, inequality, Iraq

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