Economics & Marginalia: April 30, 2021

Hi all,

A long weekend beckons invitingly, thus obliterating my ability to settle on a good intro to the links. Time was, the extra day off would be put fully to work: a night out with far too much wine and rich food, sleeping in the next day and then a lazy day in a comfortable chair and pile of books. Now, being the subject of a tiny (but good natured) tyrant, who demands control of nearly ever second of our free time, the primary appeal is the opportunity to sleep during the 7-month-old’s naps, and perhaps the opportunity to read one chapter of my ever-expanding to-read pile. Parenthood has taught me that both rational and adaptive expectations are bad models of human behaviour. I neither anticipated the effects of having a child on my ability to read, nor have I responded to them. Instead the only thing that has changed is the number of unread books accumulated. Perhaps the correct model for human behaviour is a random oscillation between ludicrous optimism and abject pessimism. And speaking of learning from the past.

1. In a moment that gave me flashbacks and anxiety attacks, this week I read Jeffrey Sachs write, about a complex issue, “there is no longer any question about who is right”. Does he never learn?! Taking the same hubris he brought to the Millennium Villages to his argument for the waiver of intellectual property rights over Covid-related technologies, most obviously vaccines, does not inspire confidence. I have no idea if this is the right policy: some people much deeper-steeped in this world than I argue that it’s a sideshow, and compulsory or heavily encouraged licensing and sharing of expertise is the real game. Others argue that sharing IP at least can’t hurt (and still others argue that it could, if IP really does protect innovation, including for booster jabs for new variants). There is a lot experts in this area know that I don’t know, and I’m fairly sure they also probably have blind spots. The only thing I’m very confident on is that there remain quite substantial questions about who is right.
2. As a kind of intellectual mouthwash, here is Dietrich Vollrath, an expert in his field, painstakingly explaining the details of a new paper digging into a fraction famous to anyone who has ever used a Cobb-Douglas production function (and let’s be honest: who among us hasn’t?): one-third. The assumed elasticity of GDP with respect to capital is one-third, an assumption that is so poorly founded that, as he says it’s not even wrong. He goes deep into an alternative way of calculating it, and comes up with… a bit below one-third. But as ever, the journey is much more illuminating than that destination makes it sound. Also, in important news, he is possibly undertaking a 30,000-tweet thread about the definition of economic growth, so down tools and follow it.
3. My favourite science writer is Maggie Koerth at FiveThirtyEight, a claim I’ve made so often I may as well append it to my email signature, and this piece, arresting from the title, Beware of Humans, is a perfect example of why. You’ve probably heard about the risks of diseases borne by animals passing to humans – in fact it would be stunning if you hadn’t, after the year we just had. Koerth shows that it’s really human-to-animal transmission that we should be so wary of because once it happens, the disease cannot be eradicated and patiently mutates until it creates a new form transmissible to humans again, with potentially awful effects.
4. I seem to remember about a year ago writing one of these links and promising not to turn into the Coronavirus weekly, which I’ve clearly failed at. But while I’m on the topic, I’ll lean in. An optimistic take: Tim Harford arguing that the enormous disruption from Covid may hide some opportunities, which I think is correct, but I sure wish we could have spotted these opportunities without a global pandemic (I mean, online meetings: not exactly flying cars, everyone). And the pessimism from Abi Adams-Prassl and co, who show that the mental health toll of lockdowns has been much harsher on women, in a way that cannot fully be explained by asymmetric labour market outcomes or childcare burdens. They are suffering more even accounting for these reasons. The pandemic sucks, that is my hot take.
5. I’ve always argued that imposing conditions on cash transfers requires we convince ourselves we either know better than the recipients of can use the condition to solve a distortion that they can’t affect themselves. Berk Ozler, in an excellent piece reviewing a new paper, points out that the bar for imposing conditions is even higher than this. If the transfer is conditional, you also need to set it at just the right level, because if it’s too large it can wind up having negative effects, inducing people to do things that are bad for them.
6. That paper looks at domestic migration and the effect of transfers conditional on internal migration (which I wish I’d read before Matt and I recorded episode three of Paper Round, out soon and mentioned below). Helen Dempster and Jasper Tjaden have a great piece looking at the effect of information campaigns on migration – the tl;dr is that they are often done poorly, with ambiguous goals and no real assessment of their cost effectiveness.
7. As I mentioned, Episode 3 of Paper Round is now in the editing stages and will cover a migration paper. But Matt and I spend a chunk of it arguing about The Falcon and the Winter Soldier, which I started off really enjoying and eventually decided was a hot mess. The Ringer sum up my ambivalence to the overall narrative perfectly in this criticism, arguing that it never truly took its grand social themes seriously and as a result did them no justice. And in another case of someone getting things wrong, I really don’t care if it’s published research, the Frogmouth is not the most photogenic bird in the world, and by the way Grauniad, I don’t think there is an ‘Emerald Turaco’, you need a birder in your subediting community…

Have a great weekend, everyone!

R