Why the Death of Shotgun Marriage Has Been Greatly Exaggerated

by on December 1, 2016 at 2:47 am in Data Source, Law, Uncategorized | Permalink

That is the paper’s subtitle, the title is “Midpregnancy marriage and divorce,” and the authors are Christina M. Gibson-Davis, Elizabeth O. Ananat, and Anna Gassman-Pines.  Here is the abstract:

Conventional wisdom holds that births following the colloquially termed “shotgun marriage”—that is, births to parents who married between conception and the birth—are nearing obsolescence. To investigate trends in shotgun marriage, we matched North Carolina administrative data on nearly 800,000 first births among white and black mothers to marriage and divorce records. We found that among married births, midpregnancy-married births (our preferred term for shotgun-married births) have been relatively stable at about 10 % over the past quarter-century while increasing substantially for vulnerable population subgroups. In 2012, among black and white less-educated and younger women, midpregnancy-married births accounted for approximately 20 % to 25 % of married first births. The increasing representation of midpregnancy-married births among married births raises concerns about well-being among at-risk families because midpregnancy marriages may be quite fragile. Our analysis revealed, however, that midpregnancy marriages were more likely to dissolve only among more advantaged groups. Of those groups considered to be most at risk of divorce—namely, black women with lower levels of education and who were younger—midpregnancy marriages had the same or lower likelihood of divorce as preconception marriages. Our results suggest an overlooked resiliency in a type of marriage that has only increased in salience.

That is via Kevin Lewis and Anecdotal.

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What are the sources of demand-side secular stagnation?

by on December 1, 2016 at 12:45 am in Economics | Permalink

In 2015, US output per capita was 12.5% below its 1950–2007 trend. This paper uses an estimated New Keynesian model to decompose the sources of this gap. The model features demographic trends, real and monetary shocks, and the occasionally binding zero lower bound on nominal interest rates. I calibrate demographic trends to observed mortality and fertility rates between 1940 and 2015, and estimate the model’s business cycle processes on quarterly data from 1984 to 2015. The model is successful in accounting for the post-1990 trends in the real interest rate, the employment-population ratio, and labor productivity growth. I extract the model’s structural shocks over the zero lower bound period and find that about half of the gap between output per capita and its long-run trend is due to the aging of the population, one fifth is due to real factors, one fifth to monetary factors, and roughly one tenth to the binding zero lower bound.

That is the job market paper from Callum Jones of NYU (pdf).  Here is his broader portfolio.  I would not model “secular stagnation” using New Keynesian models, but that granted it is remarkable how low is the contribution of the zero lower  bound to the problem.

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Carlsen > Karjakin

by on November 30, 2016 at 10:04 pm in Games | Permalink

1. Karjakin played some of the best defensive chess ever, finding resources where there appeared to be none.

2. Carlsen had become a bit lazy, relying too much on his stamina advantage to beat opponents (yes I do understand that is an odd notion of lazy!).  Yet he had no real stamina advantage over Karjakin, who is of the same age and came to the match in very good physical shape.  So Carlsen simply could not grind him down, and it took Carlsen the entire match to realize that.

3. Karjakin made very few attempts to achieve demonstrable, sharp advantages.  That limited his total number of victories to one.

4. In the rapid tie-breaker — four consecutive games in the final day — Carlsen couldn’t try to win on stamina and simply showed he was the better player across many dimensions of the game.  Karjakin posed him no problems at all in these contests.

5. Karjakin played as Carlsen’s equal for the twelve regular time control games.  Yet I don’t think he will be back as a challenger.  His style is too “drab” (Kasparov’s description) to get through all of the risk-rewarding tournaments to reach the final championship match again.

6. Perhaps rapid chess is the future of chess as a spectator sport.  Four games in a row, each twenty-five minutes per player, plus increments.  It was thrilling, and I watched on the train.

7. Putin finally lost one this year, let’s hope this reverses the trend.

Here is the Chessbase account, here is the quite good NYT story.

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The Intel anthropologist on why we are afraid of AI

by on November 30, 2016 at 2:52 pm in Philosophy, Science, Web/Tech | Permalink

Here is a separate bit from that interview:

I’m interested in how animals are connected to the internet and how we might be able to see the world from an animal’s point of view. There’s something very interesting in someone else’s vantage point, which might have a truth to it. For instance, the tagging of cows for automatic milking machines, so that the cows can choose when to milk themselves. Cows went from being milked twice a day to being milked three to six times a day, which is great for the farm’s productivity and results in happier cows, but it’s also faintly disquieting that the technology makes clear to us the desires of cows – making them visible in ways they weren’t before. So what does one do with that knowledge? One of the unintended consequences of big data and the internet of things is that some things will become visible and compel us to confront them.

And on the main question at hand:

What we are seeing now isn’t an anxiety about artificial intelligence per se, it’s about what it says about us. That if you can make something like us, where does it leave us?

Here is the full interview with Genevieve Bell.

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Wednesday assorted links

by on November 30, 2016 at 11:46 am in Uncategorized | Permalink

1. Estonian food delivery by robots.

2. Why fake data when you can fake a scientist, note that Borat still serves on a few editorial boards.

3. Fooling art experts with fake photographs.

4. Tom Price’s ACA repeal bill.

5. Signs of democratic deconsolidation? (NYT)  And Trump and Walter J. Ong.

6. The Obama overtime regulations disrespect workers (and their bosses).

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Women Working: What’s the Pill Got to Do With It?

by on November 30, 2016 at 7:25 am in Economics, History, Law, Uncategorized | Permalink

I think this is one of the best videos that we have ever done at MRUniversity–it combines history, technology and economics with a great story that links it all together. It’s the final video in the section of our Principles of Macroeconomics class covering unemployment and labor force participation. As always, the videos are free to use and they pair exquisitely well with the best principles textbook, Modern Principles.

Addendum: The video is based on some great papers, here are links: The Power of the Pill by Claudia Goldin and Lawrence Katz and Martha Bailey’s papers “Momma’s Got the Pill”: How Anthony Comstock and Griswold v. Connecticut Shaped US Childbearing and More Power to the Pill.

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Tabarrok Moving to India!

by on November 30, 2016 at 7:20 am in Travel | Permalink

I am moving to India! Next semester (approx late Jan.-May) I will doing a sabbatical in India! Home base will be Mumbai at the IDFC Institute. I will be giving some talks and talking with people all over India and I hope to make some videos for Marginal Revolution University.

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Trump’s pledge to keep investment from leaving the United States

by on November 30, 2016 at 1:31 am in Current Affairs, Economics, Law | Permalink

That is the topic of my latest Bloomberg column, here is just one bit from it:

In other words, the Trump program for protectionism could go far beyond interference in international trade. It also could bring the kind of crony capitalist nightmare scenarios described by Ayn Rand in her novel “Atlas Shrugged,” a book many Republican legislators would be well advised to now read or reread.

And:

The biggest irony of this whole Trump initiative is that it likely would lead to higher U.S. trade deficits. Economists stress the offsetting nature of trade flows and capital flows. As the accounting identities are constructed, a higher trade deficit corresponds to higher capital inflows, and a lower trade deficit corresponds to higher capital outflows. (To see the nature of these balanced transactions, imagine China selling goods and accumulating Treasury bills in return, a form of investment in this country.) So a Trumpian plan to limit capital outflows, through whatever means, is also — if only indirectly and without such intent — a plan to boost the trade deficit.

Do read the whole thing.

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Which kind of countercyclical fiscal policy is best?

by on November 30, 2016 at 12:19 am in Economics | Permalink

Miguel Faria-e-Castro, on the job market from NYU, has a very interesting paper on that question.  Here are his findings:

What is the impact of an extra dollar of government spending during a financial crisis? How important was fiscal policy during the Great Recession? I develop a macroeconomic model of fiscal policy with a financial sector that allows me to study the effects of fiscal policy tools such as government purchases and transfers, as well as of financial sector interventions such as bank recapitalizations and credit guarantees. Solving the model with nonlinear methods allows me to show how the linkages between household and bank balance sheets generate new channels through which fiscal policy can stimulate the economy, and study the state dependent effects of fiscal policy. I combine the model with data on the fiscal policy response to assess its role during the financial crisis and Great Recession. My main findings are that: (i) the fall in consumption would had been 1/3 worse in the absence of fiscal interventions; (ii) transfers to households and bank recapitalizations yielded the largest fiscal multipliers; and (iii) bank recapitalizations were closest to generating a Pareto improvement.

Bank recapitalizations — just remember that the next time you hear someone talking about “G” in the abstract.

See also this new Alesina NBER paper, indicating that the how of fiscal adjustment is much more important than the when.  No tax hikes!

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Tuesday assorted links

by on November 29, 2016 at 1:46 pm in Uncategorized | Permalink

1. Do real interest rates encourage higher savings?

2. Are you Howard Roark?  The libertarian architect.

3. A problem for industrial policy: export specialization is not as stable as you think.

4. Ted Gioia’s 100 best albums of 2016, always an event.  All kinds of music.

5. An international coastal city right next to Singapore.  And how pangolins drink.

6. Japan’s original industrialization was actually quite resource-intensive.

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Assorted Links with Commentary

by on November 29, 2016 at 11:50 am in Economics, Education, Science | Permalink

1. Due to massive inflation, shops in Venezuela are now weighing money rather than counting it–a true paper standard.

2. As the economy collapses, Venezuelan’s are turning to bitcoin–using free electricity to mine the coins–but the secret police are hunting the miners.

3. Larry White and Shruti Rajagopolan note that India’s demonetization is really an expropriation that will transfer wealth to the government. Whether the wealth transfer is of black market holdings or not remains to be seen.

4. George Borjas remember’s Castro’s demonetization:

Castro quickly found a simple way of confiscating “excess” cash. The currency was changed overnight. And everyone had to turn in their old paper currency for the new paper currency, with some limits being imposed on the amount of the transactions. There was a miles-long line on what I think was a Saturday morning, as the entire Cuban population was turned into beggars for the new currency.

5. Alex Bellos looks at Newcomb’s Problem. The answer is obvious.

6. Steven Pearlstein on Four tough things universities should do to rein in costs. I liked this bit of history:

In 2002, George Washington University President Stephen Trachtenberg noticed that the school owned roughly $1 billion worth of facilities that sat idle for at least a third of the year. If he could reconfigure the academic calendar for year-round operation, he reasoned, he could enroll thousands more students without having to build new classrooms, labs, dorms or athletic facilities.

Doing so, however, would have required some professors to periodically teach during the summer, which didn’t sit well with the Faculty Senate. Its report on the matter reads like a parody of self-interested whining by coddled academics dressed up as concern for the pedagogical and psychological well-being of their students.

Prices aren’t rising because costs are rising, however, costs are rising because prices are rising.

7. Evolution is amazing. By acting as selective breeders, poachers are changing the genetics of African elephants.

In some areas 98 per cent of female elephants now have no tusks, researchers have said, compared to between two and six percent born tuskless on average in the past.

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Airport Privatization

by on November 29, 2016 at 7:20 am in Current Affairs, Economics, Travel | Permalink

Airports in the United States need investment and improvements in operations efficiency and are thus ripe for privatization. Privatization is not a radical concept, around the world today many airports are run by private corporations or in public-private partnerships. In their latest report, The Ownership of Europe’s Airports, the Airports Council International writes:

Today, over 40% of European airports have at least some private shareholders – and these airports handle the lion’s share of air traffic. This year, about 3 out of every 4 passenger journeys will be through one of these airports…it is only a matter of time before fully publically-owned airports become a minority in the EU.

Moreover, even the public airports are typically structured as corporations that must pay their own way:

[Europe’s] airports – be they public or private – are to be run as businesses in their own right, strongly incentivised to continuously improve and underpinned by the principle that users pay a reasonable price to cover the cost of providing the facilities and services that they benefit from. There is no denying the tangible benefits that this approach has brought the EU – significant volumes of investment in necessary infrastructure, higher service quality levels, and a commercial acumen which allows airport operators to diversify revenue streams and minimise the costs that users have to pay – all of which are fundamental requirements to boost air connectivity.

The biggest restriction on airport privatization is that if a state or local government sells an airport it must use all of the proceeds to fund airport infrastructure–which makes the procedure pointless from their point of view. As I mentioned earlier, there is an Airport Privatization Pilot Program (APPP) which lifts this restriction but only if 65% of the air carriers serving the airport agree to the privatization. The APP is also slow and includes other restrictions. The Congressional Research Service has a good run down.

[Restrictions] include the need for 65% of air carriers serving the airport to approve a lease or sale of the airport; restrictions on increases in airport rates and charges that exceed the rate of increase of the Consumer Price Index (CPI), and a requirement that a private operator comply with grant assurances made by the previous public sector operator to obtain AIP [Federal] grants. In addition, after privatization the airport will be eligible for AIP formula grants to cover only 70% of the cost of improvements, versus the normal 75%- 90% federal share for AIP projects at publicly owned airports. This serves as a disincentive to privatize an airport, because it will receive less federal money after privatization.

The airlines are lukewarm on privatization. Although they would benefit from better operational efficiency, they are big recipients of the explicit and implicit subsidies and they use their effective control over airports to limit competition.

The main danger of privatization is that of monopoly power–it wouldn’t be a good idea to sell all of a city’s airports to the same corporation, for example. Thus, privatization should be accompanied by steps to increase competition. There are over 5000 non-commercial airports in the United States and some of the “National” General Aviation Airports already serve international flights (mainly corporate jets) and could be expanded to allow more commercial traffic.

Privatization should not be thought of as just a transfer of ownership but rather as a changing of the rules of the game to allow for many more private airports.

Addendum: Michael Sargent at Heritage has a useful and detailed plan. Robert Poole and Chris Edwards from Cato offer a good overview.

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The bright side, from the options market, Trump and trade

by on November 29, 2016 at 1:47 am in Data Source, Economics | Permalink

Market prices do convey important information about changing risks. For example, option prices suggest that Mexican assets are expected to deliver larger gains than losses, implying Trump won’t seek to impose headline-grabbing sanctions on the country. Although less pronounced, options market indicators are similar for China, Japan and emerging markets.

In short, the options market does not appear to view Trump as a protectionist but rather as someone who understands the value and importance of global trade.

That is from Myron Scholes in the FT.  Here is my earlier dialogue with Bob Zoellick on trade and Trump.

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What I’ve been reading

by on November 29, 2016 at 12:50 am in Books | Permalink

1. Incarnations: A History of India in Fifty Lives, by Sunil Khilnani.  A highly readable introduction to Indian history, structured around the lives of some of its major figures.  I passed along my copy to Alex.

2. Haruki Murakami, Absolutely on Music: Conversations with Seiji Ozawa.  More for classical music and Ojawa fans than Murakami readers, this is nonetheless an easy to read and stimulating set of interviews for any serious classical music listener.  They are most interesting on Mahler.

3. Elsa Morante, History.  In America, this is one of the least frequently read and discussed great European novels of the 20th century.

4. Miriam J. Laugesen, Fixing Medical Prices: How Physicians are Paid.  Will people still care about these issues for the next four years?  I hope so, because this is the best book I know of on Medicare pricing and its influence on pricing throughout the broader U.S. health care system.

My copy of Joel Mokyr, A Culture of Growth: The Origins of the Modern Economy has arrived.  It is a very good statement of how political fragmentation and intensified intellectual competition drove modernity and the Industrial Revolution.

I have only perused John H. Kagel and Alvin E. Roth, Handbook of Experimental Economics, volume 2, but it appears to be an extremely impressive contribution.

Marc Levinson’s An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy details what made the post World War II era so special in terms of its economics and income distribution and why it will be so hard to recreate.

Chris Hayes’s A Colony in a Nation, due out in March, he argues that racial equality really hasn’t improved much since 1968.

Guillermo A. Calvo, Macroeconomics in Times of Liquidity Crises is a useful book on sudden stops and related ideas.

Arrived in my pile is Yuval Noah Harati, Homo Deus: A Brief History of Tomorrow.

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Will economic populism sweep the Democrats to a new set of victories?

by on November 28, 2016 at 1:48 pm in Current Affairs, Data Source, Political Science | Permalink

Maybe not:

Interestingly enough, in two of those crucial Midwestern states that flipped to Trump, Democratic Senate candidates campaigned on economically populist platforms — but they did notably worse than Hillary Clinton. Russ Feingold underperformed Clinton by 2.4 points in Wisconsin, and Ted Strickland underperformed her by 12.8 points in Ohio. Feingold amassed a populist record of challenging big money and special interests when he was in the Senate, and Strickland harshly condemned trade deals during his campaign against Rob Portman (who served as George W. Bush’s US trade representative).

Meanwhile, the two Democratic Senate candidates in competitive races who outperformedClinton the most both self-consciously presented a moderate image rather than running as liberal firebrands. In Missouri, Jason Kander overperformed Clinton by 15.9 points, and in Indiana, Evan Bayh did 9.6 points better than her (though they both lost).

Here is more from Andrew Prokop at Vox.

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