Tuesday, May 17, 2011

chicago tribune on apologies

I was interviewed the other day for the Chicago Tribune

Please accept my apologies for bringing this sorry subject to your attention (May 10, 2011)

Monday, May 16, 2011

The curious thing about chain e-mails

I have never gotten a chain e-mail offering advice (health or viruses) that was true. (Ok, maybe 1) but 99% seem made up. And every single one of these showed up with a quick google search that usually points to snopes.com.

So as an economist, this is curious for two reasons.

1) There are certainly legitimate health warnings or virus warnings out there. How come none of them get spread?

2) I could imagine if there were some probability that messages were true, that people would find it costly to tell the difference, and I could imagine an equilibrium existing where a mix of true and false messages co-exist. But it is harder to imagine such an equilibrium when 100% are false.

Made to Stick: Why Some Ideas Survive and Others DieA past co-author of mine, Chip Heath has actually studied these things (at least the first one). I haven't read those papers yet, though I am reading his popular book Made to Stick.

Sunday, May 15, 2011

reviewlet: Name of the Wind II: The Wise Man's Fears

(Edited: penny arcade also noted that the most notable feature of the book was all the sex)

I got tricked into reading name of the wind, for all the hype it was getting from friends but also penny arcade. I didn't realize it was just part 1 of a new series. Given I haven't read much fantasy in like a decade, I have
lots of choices of complete series, but I was left stuck with the old problem (like with George RR Martin) of reading and waiting for years or decades for the series to finish.

It was quite a good book. Not great literature by any means, and not especially deep, but a richly constructed world, with believable magical technology, and a carefully thought out social structure.

Also, nice lyrical writing: "It was night again. The Waystone Inn lay in silence, and it was a silence of three parts."


I always liked bards in D&D, and the main character is basically a bard, complete with spells, and now some monk levels. The book has a somewhat satisfying love story, and uses the device that since this is the heroes' autobiography, its "ok" if it becomes cliched. I appreciated that the book was self aware enough to acknowledge these cliches, and excuses them as the liberties taken by the bard.

The Wise Man's Fear (Kingkiller Chronicles, Day 2)Book 2, The Wise Men's Fears, got somewhat tepid reviews, but I quite liked it. The writing is smoother this time (much like how rowling got smoother with each book) and while it got a bit self indulgent with the sex stuff, I appreciated that it tried. Some of tt was a risk, and a risk that didn't quite payoff, but a bold risk.

It had an extensive trip to the east (it is interesting that like Feist, the part of the fantasy world that is clearly inspired by the east--budghism, taoism, yoga--is populated by white looking people). But it was an interesting reminder of eastern philosophy and a nice new way to look at it.

All in all, the book is populated by charming characters, particularly the women (an affectation that the book acknowledges--one character interrupts the narrator to note that somehow all the women in the story are beautiful). A favorite  is Auri, (Rothfuss' version of Rowling's Luna Lovegood). Book 2 was a satisfying continuation of the story. Nothing mindblowing. But can't wait for the hopefully final installment.

Friday, May 06, 2011

The Economists' View of the World and Planet Money


The Economist's View of the WorldR- once asked me, when I was ranting about about some government policy, if you're so smart, why don't you go fix it. And my answer is that I don't need to, since I just think like an economist and all economists (including all the ones in gov't) pretty much think the same way. (The other tricky question is all economists agree, why don't those policies get enacted, but that's another story). This is especially stark with the recent trend of behavioral economics, where you have people trained in other disciplines, like Dan Ariely, talking about economics, and while Dan calls himself a behavioral economist, he is only an economist by subject matter. I had a conversation with Dan on his paper on stealing. He was noting the huge economic consequences of stealing, whereas actually to an economist, stealing by itself is not bad for welfare, it is only at transfer of wealth that leaves the total sum unchanged. Stealing is only quantitatively bad in the costs people incur to prevent theft and the impact on incentives. But if firms don't care about the theft, (as in the shrinkage that most retail firms expect, the problem is not so costly). Ariely is an excellent scholar, and even an excellent behavioral economist, but he is not an economist.

By economist, I mean PhD economist trained at most mainstream universities. We all largely learned from the same textbooks, read the same literature. There is shocking uniformity in the profession, and though outsiders often think there are large divisions say between keynesians and moneterists, on most issues, there is impressive uniformity on the epistemic basis of knowledge--in terms of which statistical tools and models we consider legitimate--which gives economics I think more coherence than other social sciences. A primer explaining economics to non-economists that I came across in grad school (The Economists View of the World) explains this well.

Probably to non-economists the distinction is subtle. Lots of pundits on tv or writers of popular books claim economic knowledge, but are not economists. Finance people on the whole often think nothing like economists (the very notion that you can make money by trading stock runs counter to central tenets of the economist world view), Black Swan writer Taleb Nassim is a good example of a finance person peddling economic ideas, but not the ideas of economists.

As a result, the vast majority of economic reporting in the news is not really economics. One of the few exceptions to this is the Planet Money Podcast (offshoot of my favorite radio show, This American Life).

I've noticed this acutely recently because I teach a class on How to Think Like an Economist.
 As I catch up with old podcasts, I find that unwittingly, a lot of the topics covered in class (How politicians's don't really create jobs, using externalities to explain npr funding, the economic implications of the japanese Tsunami, for example) were covered by Planet Money. This by itself is not so surprising since the topics were topical, but what was surprising is that they were covered in largely the same way.

In a news environment where the economists' voice is rarely heard in economic reporting, this is really refreshing. Planet Money doesn't always get it right, but it usually does.

I should acknowledge that I'm not saying this uniformity is a good thing, just that it is. Sociologists study the process of professionalization, and I often worry about blind spots it may create. For example, one of our central tenets that free trade is unambiguously good, may not be so unambiguous. After many years of pondering, I have come to believe the benefits of the coherence of the economics edifice outweigh the costs, but that is the subject for another time.

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