Saturday, December 29, 2007

On Einstein

Christmas break allows one to read books that are fairly unrelated to my PhD program. So I am currently enjoying Walter Isaacson's Einstein - His Life and Universe. It is wonderfully written and very lucid; it explains continuity in Einstein's thinking and traits a lot better than the changes, however.

I want to share two tiny passages. On page 295, Isaacson tells how U.S. Congress in 1921 debated Einstein's general theory of relativity.

For reasons fathomable only by those whi live in that capital [Washington, DC - TH], the Senate decided to debate the theory of relativity. [...] On the House side of the Capitl, Representative J.J. Kindred of New York proposed placing an explanation of Einstein's theories in the Congressional Record. David Walsh of Massachussetts rose to object. Did Kindred understand the theory? "I have been earnestly busy with this theory for three weeks," he replied, "and am beginning to see some light." But what relevance, he asked, did it have to the business of Congress? "It may bear upon the legisaltion of the future as to the general relations with the cosmos.

As much as politicians' and politics' stupidity and hubris deserves to be pointed out, Einstein also performed poorly in realm outside his genius (original HT to Greg Mankiw). Debating John D. Rockefeller in 1930,

Einstein suggested that working hours to be shortened so that, at least in his understanding of economics, more people would have a chance to be employed.


By the way: The picture accompanying this post is the Albert Einstein Memorial in Washington, DC; I am baffled that I have not seen it despite its prominent location and my numerous trips to DC.

Thursday, December 6, 2007

Germans' Buttery Fatuity

In Germany, Ikea is selling (story is in German) a pound of butter for 50 Euro-cents this weekend as some promotional deal. That's roughly slightly half the price what you'd pay in a regular supermarket. Awesome!

Not so fast. The German Farmers' Association (Deutscher Bauernverband) yells that Ikea is "shameless," treating such a precious product with such a disrespect (wanting a lower price) towards the producers.

Usually, I think of such moves in the baptists-and-bootlegger way. If some rent-seeking is pursued, there is a group that overtly preaches the virtues of such a move. They make morally palatable claims. They are the baptists. However, there is the group that covertly monetarily benefits from the rents, namely the bootleggers.

How did the German farmers' lobby manage to be baptist and bootlegger in unison?

Tuesday, December 4, 2007

The French government sells something?

Bewildering excitement set in upon reading this (NYT):

France: Government Selling Stake in Utility. Shares of the state-owned power provider Électricitée de France went on sale [...]

I was about to launch a celebration dance, but then I finished reading the sentence:

[...] as the government sought to raise about $7.4 billion to finance the university system. [...] The money is earmarked for the public university system.

Plus ça change, plus c'est la même chose!

Monday, December 3, 2007

Betting on Airstrikes...

The National Intelligence Estimate suggested that Iran has actually ended its atomic arms work. How should that impact the probability of an U.S. (and/ or Israeli) overt airstrike against Iran? Intrade suggests that there's a very, very low chance. More on prediction markets here and here.

JCR 51(6) is out!

As the semester is winding down and snow is starting to set in (well, not in Houston), and with the Christmas break around the corner, the latest issue of the Journal of Conflict Resolution comes at a very fine time. Read and enjoy!

I am looking most forward to more readings on sanctions by Letzkian and Souva, even though they do not use the best sanctions data in the world.

Wednesday, November 28, 2007

How high (low?) can you go?

From the LA Times:

For the first time since 1980, obesity figures [in the USA; TH] are unchanged since the previous survey two years earlier.

How low (or high?) can you go?

(HT: Tyler Cowen) Zimbabwe's state is so abysmal:
Zimbabwe's chief statistician has said it is impossible to work out the country's latest inflation rate because of the lack of goods in shops. [..] September's inflation rate was put at almost 8,000%, the world's highest. [...] Mr Nyoni [the head statistician; TH] said the Central Statistical Office has delayed the release of the inflation figure until an accurate way of calculating it can be found.

Thursday, November 22, 2007

Kennedy and the Lone Gunman

Everyone has seen the Zapruder film of the Kennedy Assassination. But what if the film captures shot two and three, but not the very first one fired at the presidential motorcade? An opinion piece in the NYT argues this:

And why has it taken so long to realize that the assassination and the Zapruder film are not one and the same? Part of the answer lies in the power of the film itself. As the critic Richard B. Woodward wrote in The Times in 2003, the assassination became “fused with one representation, so much so that Kennedy’s death is virtually unimaginable without Zapruder’s film.” To that, one has to add the element of distraction. The Warren Commission did not pursue its May 1964 insight because it was fixated not on the shot that missed but on the ones that killed the president.

If this belated revelation changes nothing from one perspective — Oswald still did it — it simultaneously changes everything, if only because it disrupts the state of mind of everyone who has ever been transfixed by the Zapruder film. The film, we realize, does not depict an assassination about to commence. It shows one that had already started.

That brings back memories of a hotel lobby in Washington where the hotel staff ordered a group of people (including me) back to their rooms when a (slightly drunk) friend of mine loudly insisted that Bell Helicopter was involved in the the JFK assissination.

Monday, November 19, 2007

Is the surge working?

Is it working? Let's look at bonds markets. Michael Greenstone of MIT does so (link to paper on his website). Here's the abstract of his paper:

There is a paucity of facts about the effects of the recent military Surge on conditions in Iraq and whether it is paving the way for a stable Iraq. Selective, anecdotal and incomplete analyses abound. Policy makers and defense planners must decide which measures of success or failure are most important, but until now few, if any, systematic analyses were available on which to base those decisions. This paper applies modern statistical techniques to a new data file derived from more than a dozen of the most reliable and widely-cited sources to assess the Surge's impact on three key dimensions: the functioning of the Iraqi state (including civilian casualties); military casualties; and financial markets' assessment of Iraq's future. The new and unusually rigorous findings presented here should help inform current evaluations of the Surge and provide a basis for better decision making about future strategy.

The analysis reveals mixed evidence on the Surge's effect on key trends in Iraq. The security situation has improved insofar as civilian fatalities have declined without any concurrent increase in casualties among coalition and Iraqi troops. However, other areas, such as oil production and the number of trained Iraqi Security Forces have shown no improvement or declined. Evaluating such conflicting indicators is challenging.

There is, however, another way to assess the Surge. This paper shows how data from world financial markets can be used to shed light on the central question of whether the Surge has increased or diminished the prospect of today's Iraq surviving into the future. In particular, I examine the price of Iraqi state bonds, which the Iraqi government is currently servicing, on world financial markets. After the Surge, there is a sharp decline in the price of those bonds, relative to alternative bonds. The decline signaled a 40% increase in the market's expectation that Iraq will default. This finding suggests that to date the Surge is failing to pave the way toward a stable Iraq and may in fact be undermining it.

HT to Gary Becker and Richard Posner who have further comments. Becker says this (amongst other things) this: "Whatever the final conclusions about the evidence on the political future of Iraq provided by its bonds, financial markets are an underutilized source of information about the expectations of investors about political outcomes."

More Hansonianism

For those that might think that Robin Hanson deals with economics and is therefore only partially relevant to IR, let me preventively counter by linking to his latest post at Overcoming Bias. He delineates nicely how prediction markets (on JSTOR) can inform development policies. Now that's IR and IPE.

Sunday, November 18, 2007

Big, BIG Ideas by Robin Hanson

George Mason's Robin Hanson is one of the most prolific, earth-shaking thinkers I can think of. (The UK Observer commented on him: "Flicking through Robin's thoughts ... you start to feel the ground shifting beneath you.") A very concise primer is this 70 minute interview from Guatemala. It is by and large covers everything Hanson covers: transhumanism, roboters, future of humanity, health economics, prediction markets, rationality of disagreement. Check it out. No, wait: CHECK IT OUT. Also check out OvercomingBias, where he is one of the bloggers. EconTalk did an interview with him as well.

Here are a few of my favorite readings:
- Catastrophe, Social Collapse, and Human Extinction (PDF)
- Shall We Vote on Values, But Bet on Beliefs? (PDF) - I've never made so many positive as well as negative remarks at the margins of the printout.
- Cut Medicine in Half
- Fourteen Wild Ideas - Five Of Which Are True!

Wednesday, November 14, 2007

The more you travel, the more you will export?

In the latest issue of The World Economy, Volker Nitsch investigates whether more state visits are correlated with higher levels of trade. Here's the abstract.

Politicians travel extensively abroad, for various reasons. One purpose of external visits is to improve bilateral economic relations. In this paper, I examine the effect of state visits on international trade. Based on a large data set that covers the travel activities of the heads of state of France, Germany and the United States for the period from 1948 to 2003, I find that state and official visits are indeed positively correlated with exports. I first apply a gravity model of trade to control for other trade determinants and find that a visit is typically associated with higher exports by about 8 to 10 per cent; the results are sensitive to the type of visit (as they should). I then use a differences-in-differences specification to deal with the issue of reverse causality. The results show a strong, but short-lived effect of visits on bilateral exports growth, which is driven by repeated visits to a country. Additional support is provided by an exploratory instrumental variables analysis.

Maybe this effect even trumps the contract-intensive-money effects?

Tuesday, November 13, 2007

APSR, November Issue

The new issue of the American Political Science Review is out. Robert Powell's article has the highest symbols-to-plain-words ratio I've ever encountered in a political science piece.

Wednesday, October 31, 2007

UFOs and the presidency

Is anyone up to write a NSF proposal to research whether presidential candidates benefit from claiming to have seen UFOs?

The LA Times offers some cues.

Tuesday, October 30, 2007

ISP November issue

The November 2007 issue of International Studies Perspectives has been released.

If you're becoming ABD after 2010...

For us 2007 newbies, there is a chance that a deluge of new data should be available by the time we become ABD. Via Dani Rodrik, The Event Analysis.

Sunday, October 28, 2007

Economics of Blackwater

Tyler Cowen's latest NYT column is out. It's about Blackwater as a contractor of the United States. This month's edition of his column is not as insightful as some of the past (his on inequality is superb). The key passage is (probably) this one:

Among many Iraqis, Blackwater and other companies have a reputation for getting the job done without much caring about Iraqis who get in the way. But part of the problem may stem from economic incentives. If Blackwater is assigned to protect a top American official, who is later assassinated, Blackwater may lose future business. A private contractor doesn’t have a financial incentive to protect Iraqi citizens, who are not paying customers. Ultimately, this reflects the priorities of the United States military itself. American casualties are carefully recorded and memorialized, but there is no count of Iraqi civilian deaths.

Read the whole thing, in particular if you're with a weak economics background.

Saturday, October 27, 2007

AIDS via trade?

Alongside Justin Wolfers and Bryan Caplan, Emily Oster is amongst my favorite young rising-star economists. Via Tyler Cowen, I learn that she has a new working paper (PDF) out. Here's the abstract:
I generate new data on HIV incidence and prevalence in Africa based on inference from mortality rates. I use these data to relate economic activity (specifically, exports) to new HIV infections in Africa and argue there is a significant and large positive relationship between the two: a doubling of exports leads to as much as a quadrupling in new HIV infections. This relationship is consistent with a model of the epidemic in which truckers and other migrants have
higher rates of risky behavior, and their numbers increase in periods with greater exports. I present evidence suggesting that the relationship between exports and HIV is causal and works, at least in part, through increased transit. The result has important policy implications, suggesting (for example) that there is significant value in prevention focused on these transit-oriented groups. I apply this result to study the case of Uganda, and argue that a decline in exports in the early 1990s in that country appears to explain between 30% and 60% of the decline in HIV infections. This suggests that the success of the Ugandan education campaign against HIV - the ABC campaign - has been overstated.

I first learned about her work by reading her paper (PDF) on the economic analysis of AIDS. After finishing reading it, I wrote the word "wow" on the front of the printout. The copy lies still in my office cubicle.

A little more about Emily can be learned here (a light read by hers in Esquire magazine; if you click this month (October 2007), then you'll also get a peek at Charlize Theron...), and here. She can also be seen giving a talk at the TED conference.

Friday, October 26, 2007

Colorful Fontana di Trevi

Here's the picture of the Fontana di Trevi. Some person dropped dye into the water of the Fontana (read here). Admittingly, it looks quite appealing as a change; as a permanent feature, I wouldn't appreciate it much. I am fairly sure this will become an anecdote tourist guides will tell for many years.

Oddest sentence read before 8.30am...

Decapitation is, in most instances, associated with a decline in IQ.

From the online edition of The Times.