
James Heckman on the lab rats fighting back against the randomisters
18 Oct 2019 Leave a comment
in applied price theory, applied welfare economics, econometerics, economics of bureaucracy, economics of information, Public Choice Tags: The fatal conceit

Offended 9 year old girl objects to math question about weight
18 Oct 2019 Leave a comment
This is one of those issues where I can sort of see a point, but in general think it’s also overblown. In fact, it was the subject of an NBC Today show post and tv segment. It turns out that a nine year old Utah girl named Rhythm Pacheco was asked to answer a math question in which the weights of various students (females) were compared. In particular, as you see below, it was a simple subtraction question, one that Rhythm answered but then expressed anger, saying she “wont right this its rood” (committing four errors in five words). Here’s her answer.
In the NBC video on the site, the hosts get all upset and see the question as sexist (or otherwise offensive).
Now Rhythm wrote a nice note to her teacher, and the teacher responded nicely (and corrected Rhythm’s writing in brown ink!:
Here’s a television report from…
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“Eliminating Uncertainty in Market Access: The Impact of New Bridges in Rural Nicaragua,” W. Brooks & K. Donovan (2018)
18 Oct 2019 Leave a comment
It’s NBER Summer Institute season, when every bar and restaurant in East Cambridge, from Helmand to Lord Hobo, is filled with our tribe. The air hums with discussions of Lagrangians and HANKs and robust estimators. And the number of great papers presented, discussed, or otherwise floating around inspires.
The paper we’re discussing today, by Wyatt Brooks at Notre Dame and Kevin Donovan at Yale SOM, uses a great combination of dynamic general equilibrium theory and a totally insane quasi-randomized experiment to help answer an old question: how beneficial is it for villages to be connected to the broader economy? The fundamental insight requires two ideas that are second nature for economists, but are incredibly controversial outside our profession.
First, going back to Nobel winner Arthur Lewis if not much earlier, economists have argued that “structural transformation”, the shift out of low-productivity agriculture to urban areas and non-ag sectors, is fundamental…
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Lant Pritchett — The Debate about RCTs in Development is over.
18 Oct 2019 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, development economics, economics of bureaucracy, economics of crime, economics of education, economics of information, economics of regulation, growth disasters, growth miracles, history of economic thought, industrial organisation, labour economics, law and economics, property rights, Public Choice
What Randomization Can and Cannot Do: The 2019 Nobel Prize
18 Oct 2019 Leave a comment
“A PhD student of ours on the market this year, Carlos Inoue, examined the effect of random allocation of a new coronary intervention in Brazilian hospitals. Following the arrival of this technology, good doctors moved to hospitals with the “randomized” technology. The estimated effect is therefore nothing like what would have been found had all hospitals adopted the intervention. This issue can be stated simply: randomizing treatment does not in practice hold all relevant covariates constant, and if your response is just “control for the covariates you worry about”, then we are back to the old setting of observational studies where we need a priori arguments about what these covariates are if we are to talk about the effects of a policy.”
It is Nobel Prize season once again, a grand opportunity to dive into some of our field’s most influential papers and to consider their legacy. This year’s prize was inevitable, an award to Abhijit Banerjee, Esther Duflo, and Michael Kremer for popularizing the hugely influential experimental approach to development. It is only fitting that my writeup this year has been delayed due to the anti-government road blockades here in Ecuador which delayed my return to the internet-enabled world – developing countries face many barriers to reaching prosperity, and rarely have I been so personally aware of the effects of place on productivity as I was this week!
The reason for the prize is straightforward: an entire branch of economics, development, looks absolutely different from what it looked like thirty years ago. Development economists used to be essentially a branch of economic growth. Researchers studied topics like the productivity of large…
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Video Clips of Economists Explaining for Intro Econ Classes
17 Oct 2019 Leave a comment
Superb Timothy Taylor on his super blog links to these intro econ videos:
I know a number of economics faculty who have been incorporating video clips into their classes. Sometimes it’s part of a lecture presentation. Sometimes it’s for students to watch before class. For intro students in particular, it can be a useful practice because it gives them a sense that they are being introduced to a universe of economists, not just to one professor and a textbook. The faculty member can also react to the video clip, and in this way offer students some encouragement to react and to comment as well–in a way that students might not feel comfortable reacting if they need to confront their own professor.
Amanda Bayer and Judy Chevalier have been compiling a list of video clips that may be useful for the standard intro econ class. It’s available at the Diversifying Economic…
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Anurag Deb: Identity: Northern Ireland’s Gordian Knot
17 Oct 2019 Leave a comment
UK Constitutional Law Association
On 14 October 2019, the Upper Tribunal (UT) handed down judgment in SSHD v De Souza, immediately dividing commentators both in and outside Northern Ireland. Briefly, the UT had heard the Home Secretary’s appeal against the First-tier Tribunal (FTT) decision which had declared that the American claimant (respondent in the UT) was entitled to apply to reside in Northern Ireland under the EU Citizen’s Directive because his wife was permitted to self-identify as an Irish national in accordance with the provisions of the Good Friday Agreement (GFA). British nationality, the FTT declared, could not be “imposed” on her at birth, flying in the face of the British Nationality Act 1981 (BNA), section 1 of which, it was argued, does precisely that. The UT allowed the appeal and overturned the FTT judgment, revealing a tension which goes far beyond immigration law.
Constitutional
logic
The claimant’s case involved a…
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Sex by Deception? Perjury?
17 Oct 2019 Leave a comment
Sex by deception: Legal Case.
I was not intending to blog this case. I fear the bald facts lend themselves to a curiosity born out of prurience. I myself was intrigued so I am not in any position to judge. It is merely a natural reaction to the facts, as laid out in the case. Transcript
The bare facts of the case are:
On reflection, I decided to blog as it raises the issue of Sex By Deception, currently a criminal offence. There is talk about reviewing the law. Stonewall are one of the organisations lobbying for this:
Whilst there could be a progressive case for reviewing the law around sex by deception (I am thinking of Spy cops) it’s also fraught with risk. I am mainly thinking of #CottonCeiling here. The term #CottonCeiling was coined by a trans porn actor and activist, Drew DeVeux. It describes the “exclusionary”…
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Douglass North and Timur Kuran: Institutions and Economic Performance
17 Oct 2019 Leave a comment
in applied price theory, applied welfare economics, Austrian economics, comparative institutional analysis, constitutional political economy, defence economics, development economics, economic history, economics of bureaucracy, economics of education, economics of regulation, economics of religion, financial economics, growth disasters, growth miracles, history of economic thought, income redistribution, industrial organisation, law and economics, property rights, Public Choice, rentseeking, survivor principle Tags: The Great Enrichment
Javier García Oliva: Sentencing the Catalan Separatists: The Painful Vindication of Equality Before the Law and Separation of Powers
16 Oct 2019 Leave a comment
The fundamental point is that a group of people exercising political power decided that they were justified in ignoring a court of law which was delineating the scope of their authority. This is key, because if the executive is free to set the limits on the boundaries of executive power, then the separation of powers becomes a mockery, and no effective safeguards against tyranny remain.
UK Constitutional Law Association
As the dust settles following Miller (No. 2)/Cherry, tension inevitably mounts over the next instalment of the Brexit saga, and how the Prime Minister will interpret his commitment to respecting the Benn Act. Against this backdrop, it is interesting to speculate as to whether recent events in Spain will have any impact upon his decisions, because the Tribunal Supremo in Madrid has just sentenced the Catalan politicians who chose to disregard both the Spanish Constitution and the courts. In short, although cleared of the most serious charge of rebellion, the majority were convicted of the lesser (but still extremely grave) offence of sedition, whilst others were found to be guilty of misusing public funds.
Even though the incarcerated separatists and their followers argue that this was a political decision, maintaining that they are prisoners of conscience, there is no evidence to support such an allegation. Indeed, it flies…
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Angus Deaton Understanding and misunderstanding randomized controlled trials
16 Oct 2019 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, development economics, econometerics, economics of bureaucracy, economics of crime, economics of education, economics of information, growth disasters, health economics, labour economics, labour supply, law and economics, managerial economics, organisational economics, personnel economics, Public Choice, public economics, theory of the firm Tags: offsetting behaviour, The fatal conceit, The pretence to knowledge, unintended consequences
Tonight’s Democratic debate
16 Oct 2019 Leave a comment
I didn’t think I’d learn anything, and I really haven’t. The only change in my attitudes is that I like Elizabeth Warren less and Pete Buttigieg more, and everyone else pretty much the same as before. Even though “Mayor Pete” seems to have little chance to be the Democratic nominee, Warren’s evasion of questions grates on me. She dissimulates too much.
At least Bernie admits that “Medicare for All” will entail an increase in taxes for everyone, but says—and this is the way to couch it—that although taxes will go up, medical care costs for the poor and middle class will go down more. In net, he says, they’ll be paying less. I’m not sure that’s true, and I don’t favor “Medicare for all” (I favor a public option), but at least he’s honest. Warren can’t even admit that.
And Biden still looks befuddled.
I don’t think I can…
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35 years later: Diamond-Dybvig model of bank runs
16 Oct 2019 Leave a comment
in applied price theory, applied welfare economics, business cycles, comparative institutional analysis, economic growth, economic history, global financial crisis (GFC), great depression, great recession, income redistribution, industrial organisation, law and economics, macroeconomics, monetary economics, property rights, Public Choice, rentseeking, survivor principle Tags: bank panics, bank runs, deposit insurance
Deirdre McCloskey on why liberalism works
16 Oct 2019 Leave a comment
in applied price theory, comparative institutional analysis, constitutional political economy, development economics, economic growth, economic history, economics of bureaucracy, economics of education, economics of regulation, entrepreneurship, growth disasters, growth miracles, health economics, human capital, income redistribution, industrial organisation, international economics, labour economics, law and economics, macroeconomics, Marxist economics, poverty and inequality, property rights, Public Choice, public economics, Rawls and Nozick, rentseeking, survivor principle Tags: The Great Enrichment





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