Economics & Marginalia: April 1, 2022

Hi all,

Given the date, I was incredibly tempted to simply replace every hyperlink in today’s emails with Rick Astley singing Never Gonna Give You Up, but had I done so you’d have missed out on gems like this, this and this. There might have been some superb April Fool’s today—I particularly enjoyed Rory Stewart pretending to take a job as Boris Johnson’s Director of Communications, Tatyana Deryugina pretending IVs have been redeemed and the Daily Mail pretending to be a news outlet—but in the end, I there was too much good economics this week to replace all the links for a cheap laugh. And most of all, I couldn’t possibly deprive you of this, the only worthwhile take on the whole Will Smith slap thing I’ve read so far: the only thing I’ve read that manages to analyse it without making it into a much bigger deal than it was. And now, on to the links.

1. By far the best thing I read all week was this superb interview of Arvind Subramanian by Noah Smith. It’s long, but the correct time comparison is not another article you might read, but a course on Indian economic history, because that’s what you get from reading it. It’s my favourite kind of interview: well-structured, with someone who knows the subject backwards, forwards, left and right, and packed with references to superb research that lets you go deeper into the points Arvind makes. I came out of this feeling that I understood India’s economy far better than I ever have before.
2. Another learning experience, albeit more straightforwardly depressing than the story of India’s economy: Robert Schultz and Anna Stansbury have a very good, detailed Peterson Working Paper on the shocking state of socioeconomic diversity in the US economics profession. It doesn’t surprise me (barriers to entry in any higher education field are high, and barriers in a technical, highly relational field like economics are astronomical). But it is a problem: who asks and answers the questions determines what questions get asked. I was re-reading Kenneth Arrow’s 1974 book The Limits of Organization this week; in the first few pages he says all economists would agree that minimum wages are bad for workers; would a more diverse profession have questioned that a little earlier than it did?
3. I remember a little more than a decade ago, there was a whole thing in the aid blogosphere (yes, that was once a thing, and even just saying it makes me feel like that Steve Buscemi meme) about how useless a lot of well-intentioned aid was. Chris Blattman channels that energy in this post, but can’t help himself being earnest at the end and giving actual good advice for supporting people in Ukraine, worth reading for both parts. And a bonus: he bemoans how easily propaganda is being shared uncritically on social media, forgetting momentarily that social media is optimised only for unearned confidence and arguments which no-one gives any ground on (see Smith, Will). Related: A superb piece by Kaushik Basu in Project Syndicate about the need to establish a way of governing the new, superpowered sanctions the West have now discovered.
4. I absolutely loved this by Monica Potts at FiveThirtyEight: how happy are Americans, given the horrorshow couple of years they’ve had? The answer is surprising: most people report pretty high personal happiness, even while being very dissatisfied with the direction of the country. As she puts it “People in general are resilient and optimistic and can find ways to thrive even in the worst of times.” The answers, though, mark important heterogeneity across groups and topics (I imagine the sister story on how Congress walked away from the expanded Child Tax Credit is one of the reasons for pessimism on the direction of the country). It’s fascinating. I wish we had more journalism like this in the UK, apart from the odd FT writer.
5. Erhun Artuk and co-authors have a good write-up in Vox of new work which uses careful modelling to predict the effect of the war in Ukraine (and specifically its effect on food prices) on household income levels on a country-by-country basis across developing countries. Very good, and better news than I was expecting, at least for Africa.
6. Great Tim Harford love letter to the oil that keeps, well, everything, running: maintenance. I still remember in my early days in the Ministry of Finance in Malawi, listening to the DFID economist Alan Whitworth berating the Government for ignoring maintenance costs in its budget… and then watching as our entire road stock fell apart over the next two years. It taught me two things: always listen to Alan, and fix things early and often.
7. I ended with basketball last week, and I’m going to do it again this week (with a little gift for the non-sports fans at the end): Tom Aston wrote a nice piece on basketball stats and how they hold lessons for value in evaluation. I enjoyed it on its own terms, but I liked it even more for introducing me to this YouTube channel, and its take on LeBron’s claim to be the greatest of all time (for me, this was settled in 2016, when LeBron beat the greatest regular season team I’ve ever seen play from a 3-1 hole in the NBA finals. Jordan’s best competition was never nearly as good as those Warriors were.) And lastly, if basketball isn’t for you, I’ve never met anyone who didn’t like this.

Have a great weekend, everyone!

R