Noah Smith on Krugman and economics; Deming, Ong, and Summers on the changing job structure; John Cochrane on costs of regulation; Krugman's substack on crypto
did an experiment on economists themselves, and found that they gave much more credence to ideas that they thought came from prominent mainstream figures in the field:
Using an online randomized controlled experiment involving 2425 economists in 19 countries, we examine the effect of ideological bias on views among economists. Participants were asked to evaluate statements from prominent economists on different topics, while source attribution for each statement was randomized without participants’ knowledge. For each statement, participants either received a mainstream source, an ideologically different less-/non-mainstream source, or no source.
We find that changing source attributions from mainstream to less-/non-mainstream, or removing them, significantly reduces economists’ reported agreement with statements. This contradicts the image economists have of themselves, with 82% of participants reporting that in evaluating a statement one should only pay attention to its content.
When I saw it, I knew I should save it. I’m not an economist…or really anything…other than a guy working to understand stuff. It seems it could apply across a broad spectrum of human experience.
Orchestras had a gender bias with tryouts. They solved it by putting the musician to be evaluated behind a screen. No doubt there is a similar problem with research funding. For a variety of reasons it would be more difficult here but no less beneficial if it could be done.
On Argentina: I’ve heard a complaint that DOGE doesn’t go after entitlements spending, and therefore isn’t serious because entitlements spending is the bulk of government spending. But Argentina’s example is that a lot of the impact of government isn’t government’s spending, but rather it’s “costing” – and “costing” in terms of regulation is, I would bet, an order of magnitude more of a drag on the economy than taxation.
At least taxation is visible and quantifiable. But when you see something like the new AI Diffusion export control rule, how many people, how many hours, will be diverted across private industry from otherwise economically productive activities and into compliance, simply because of this one rule? I’m not arguing here whether that rule is good or bad, per se, but the cost is incredible.
Though I haven't read his substack but a few times, we are agreed on Krugman. His best stuff is the purest economics, his worst the most partisan. What I don't get is his writing on stimulus spending. While I can appreciate the benefits he sees, to the best of my knowledge he never discussed the downsides, particularly how to end it. That is not just difficult economically but politics makes it far harder. Does he not see this, ignore it because he has no answer, or something else?
As the 2008 crisis unfolded, I don’t believe a majority of Americans understood what the government was doing to be providing “competitive advantage”, but that’s what it was (among other things).
This does some heavy lifting.
“.. Banking policies help maintain what I call the “two-drunks model”.. banks are incented to lend to government and government-favored sectors; and government gives banks competitive advantages, such as deposit insurance and bailouts.”
"(Some of those regulations are worth it, of course. But not all.)"
I find it more than a little suspect that looking at multiple areas of Argentina's deregulation all came up with a 30% price drop. Be that as it may, I find the sentence above the most important in Cochrane's piece. Indiscriminate cutting of regulation is likely to be worse than too much regulation. Much of it actually does make things better and getting rid of the bad parts doesn't happen in large part because it is difficult to correctly identify those parts. I have zero expectation that Argentina's result has been as one-sided as suggested.
I don't remember it precisely but there's a dictum about not tearing down a fence until you know why it was put there
"And while getting a precise number is almost by definition impossible, there’s no real doubt that many and probably most of the Benjamins out there are being held for illicit purposes."
I also have no doubt many are used for illicit reasons but surely many are used as one's life savings. I wouldn't want to guess which use is greater without some kind of evidence.
"It could be good at working with people—the robot home health aid and the AI tutor."
I would segment these two examples further. How close is the technology to add an AI tutor to Khan Academy right now? How close are we to letting an AI robot change diapers and wipe butts of the bed bound? Is the robot that is good with working with people still going to need to call the fire department for a lift assist?
Javdani and Chang (2019) (https://substack.com/redirect/687940e2-679b-4f9f-96b8-034c09838bde?j=eyJ1IjoiMjg2Zmt3In0.tEnleokpnpl5rK9THKJ8ZgpFU8vKEDmAxqVN7Jl4p_I)
did an experiment on economists themselves, and found that they gave much more credence to ideas that they thought came from prominent mainstream figures in the field:
Using an online randomized controlled experiment involving 2425 economists in 19 countries, we examine the effect of ideological bias on views among economists. Participants were asked to evaluate statements from prominent economists on different topics, while source attribution for each statement was randomized without participants’ knowledge. For each statement, participants either received a mainstream source, an ideologically different less-/non-mainstream source, or no source.
We find that changing source attributions from mainstream to less-/non-mainstream, or removing them, significantly reduces economists’ reported agreement with statements. This contradicts the image economists have of themselves, with 82% of participants reporting that in evaluating a statement one should only pay attention to its content.
thanks. very relevant. Too bad they confounded "ideologically different" with "less-/non-mainstream" I would want to separate out the two effects.
When I saw it, I knew I should save it. I’m not an economist…or really anything…other than a guy working to understand stuff. It seems it could apply across a broad spectrum of human experience.
Would almost certainly apply to Trump haters & supporters, on Trump vs Obama policy quotes without names or dates.
That's a great link and agree this sort of analysis should spread across most areas of study, as well as what you call "human experience".
Orchestras had a gender bias with tryouts. They solved it by putting the musician to be evaluated behind a screen. No doubt there is a similar problem with research funding. For a variety of reasons it would be more difficult here but no less beneficial if it could be done.
I think the blind auditions turned out to favor men; Andrew Gilman wrote about this.
Best to assume “nothing holds up”.
I don't know if that is true but it's my understanding that when the evaluators weren't blinded, it favored men more.
On Argentina: I’ve heard a complaint that DOGE doesn’t go after entitlements spending, and therefore isn’t serious because entitlements spending is the bulk of government spending. But Argentina’s example is that a lot of the impact of government isn’t government’s spending, but rather it’s “costing” – and “costing” in terms of regulation is, I would bet, an order of magnitude more of a drag on the economy than taxation.
At least taxation is visible and quantifiable. But when you see something like the new AI Diffusion export control rule, how many people, how many hours, will be diverted across private industry from otherwise economically productive activities and into compliance, simply because of this one rule? I’m not arguing here whether that rule is good or bad, per se, but the cost is incredible.
Though I haven't read his substack but a few times, we are agreed on Krugman. His best stuff is the purest economics, his worst the most partisan. What I don't get is his writing on stimulus spending. While I can appreciate the benefits he sees, to the best of my knowledge he never discussed the downsides, particularly how to end it. That is not just difficult economically but politics makes it far harder. Does he not see this, ignore it because he has no answer, or something else?
If ever there was something that deserved to be called the "two-drunks model", it's banking and government.
As the 2008 crisis unfolded, I don’t believe a majority of Americans understood what the government was doing to be providing “competitive advantage”, but that’s what it was (among other things).
This does some heavy lifting.
“.. Banking policies help maintain what I call the “two-drunks model”.. banks are incented to lend to government and government-favored sectors; and government gives banks competitive advantages, such as deposit insurance and bailouts.”
What I will most remember Krugman for will be his attacks on Milton Friedman that took place as soon was no longer around to defend himself.
""I like to say that banking is adjacent to government and crypto is adjacent to criminals.""
Thanks for this, helpful
"(Some of those regulations are worth it, of course. But not all.)"
I find it more than a little suspect that looking at multiple areas of Argentina's deregulation all came up with a 30% price drop. Be that as it may, I find the sentence above the most important in Cochrane's piece. Indiscriminate cutting of regulation is likely to be worse than too much regulation. Much of it actually does make things better and getting rid of the bad parts doesn't happen in large part because it is difficult to correctly identify those parts. I have zero expectation that Argentina's result has been as one-sided as suggested.
I don't remember it precisely but there's a dictum about not tearing down a fence until you know why it was put there
"And while getting a precise number is almost by definition impossible, there’s no real doubt that many and probably most of the Benjamins out there are being held for illicit purposes."
I also have no doubt many are used for illicit reasons but surely many are used as one's life savings. I wouldn't want to guess which use is greater without some kind of evidence.
"It could be good at working with people—the robot home health aid and the AI tutor."
I would segment these two examples further. How close is the technology to add an AI tutor to Khan Academy right now? How close are we to letting an AI robot change diapers and wipe butts of the bed bound? Is the robot that is good with working with people still going to need to call the fire department for a lift assist?