Thursday, October 30, 2014

GDP: PKrugman, "in praise of cheap labor"



Krugman 1997

And as long as you have no realistic alternative to industrialization based on low wages, to oppose it means that you are willing to deny desperately poor people the best chance they have of progress for the sake of what amounts to an aesthetic standard--that is, the fact that you don't like the idea of workers being paid a pittance to supply rich Westerners with fashion items.
In short, my correspondents are not entitled to their self-righteousness. They have not thought the matter through. And when the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty.

Wednesday, October 29, 2014

TNX,Gini: Fed v GMO Montier, Labor $ / GDP rock steady v busted




Montier from climateer

Connecting short-termism with its effects on society and economy, Montier pointed to “three stylized facts”:
  1. Business investment as a percentage of GDP is declining.
  2. There is rising income inequality in society (PDF), and the share of income of business executives and financiers has increased dramatically.
  3. Labor is losing its share of GDP.
st louis fed: 1948-2004 data





http://kaiserfamilyfoundation.files.wordpress.com/2013/01/marketplace101309fig2_1.gif?w=550&h=311




Tuesday, October 28, 2014

Poker,Keynes: UF, "Oxytocin improves Mind-Reading in Humans"



Oxytocin Improves “Mind-Reading” in Humans

Background: The ability to “read the mind” of other individuals, that is, to infer their mental state by interpreting subtle social cues, is indispensable in human social interaction. The neuropeptide oxytocin plays a central role in social approach behavior in nonhuman mammals.
Methods: In a double-blind, placebo-controlled, within-subject design, 30 healthy male volunteers were tested for their ability to infer the affective mental state of others using the Reading the Mind in the Eyes Test (RMET) after intranasal administration of 24 IU oxytocin.
Results: Oxytocin improved performance on the RMET compared with placebo. This effect was pronounced for difficult compared with easy items.
Conclusions: Our data suggest that oxytocin improves the ability to infer the mental state of others from social cues of the eye region.
Oxytocin might play a role in the pathogenesis of autism spectrum disorder, which is characterized by severe social impairment.

MThoma: "not job of economists to tell society whether or not redistribute income, or [use] fiscal policy. to combat recessions"

and if ya don't use money to incent... would Baumol say that incents non-productive, destructive, or outright criminal entrepreneurship ....

by way of climateer

It’s not the job of economists to tell society whether or not they should redistribute income, or if fiscal policy should be used to combat recessions. It’s to inform society of the potential consequences of policy actions, good or bad, and how to best reach particular goals. Too many economists allow their ideological beliefs to color the research they conduct, the advice they give, and the presumed goals of policy.We need to do a much better job of asking the right questions, and being ready to give judgment-free advice on whatever politicians believe is the best course of action. That’s not to say that economists should never warn that a policy may have large, negative effects on economic growth, employment, etc., – austerity comes to mind – only that policymakers should be made fully aware of the tradeoffs they face when pursuing particular policies.The question of redistribution is coming, and we need to be ready when it does.
It’s not the job of economists to tell society whether or not they should redistribute income, or if fiscal policy should be used to combat recessions. It’s to inform society of the potential consequences of policy actions, good or bad, and how to best reach particular goals. Too many economists allow their ideological beliefs to color the research they conduct, the advice they give, and the presumed goals of policy.
We need to do a much better job of asking the right questions, and being ready to give judgment-free advice on whatever politicians believe is the best course of action. That’s not to say that economists should never warn that a policy may have large, negative effects on economic growth, employment, etc., – austerity comes to mind – only that policymakers should be made fully aware of the tradeoffs they face when pursuing particular policies.
The question of redistribution is coming, and we need to be ready when it does.
- See more at: http://www.thefiscaltimes.com/Columns/2014/10/28/Are-Economists-Ready-Income-Redistribution#sthash.nd59fD0R.dpuf

Labor Economics: UEA v Waldman, kinky utility curves v ir-"rational regrets"

trying to fool smart kids to work cheap, eh ..........

Peasant Economics: Farm Households in Agrarian Development

 By Frank Ellis
the utility or happiness of the peasant household is a function of income (Y) and leisure (H)....   Any point on an income-leisure indifference curve .. is the households subjective wage level.  The range and relative level of this subjective wage... is constrained ... by the requirement that the farm household meets its minimum acceptable standard of living



waldman



Suppose that you have a career choice to make:
  1. There is a “safe bet” available to you, which will yield a discounted lifetime income of $1,000,000.
  2. Alternatively, there is a risky bet, which will yield a discounted lifetime income of $100,000,000 with 10% probability, or a $200,000 lifetime income with 90% probability.
The expected value of Option 1 is $1,000,000. The expected value of Option 2 is (0.1 × $100,000,000) + (0.9 × $200,000) = $10,180,000. For a rational, risk-neutral agent, Option 2 is the right choice by a long-shot.
A sufficiently risk-averse agent, of course, would choose Option 1. But given these numbers, you’d have to be really risk-averse. For most people, taking the chance is the rational choice here.

Suppose a lot of people face decisions like this, and suppose they behave perfectly rationally. They all go for Option 2. For 90% of the punters, the ex ante wise choice will turn out to have been an ex post mistake. A bloodless rational economic agent might just accept that get on with things, consoling herself that she had made the right decision, she would do the same again, that her lived poverty is offset by the exorbitant wealth of a twin in an alternate universe where the contingencies worked out differently.


GDP: SRWaldman, smart kids should risk "discounted lifetime income ... $200,000"

Charity for Waldman....


waldman


Suppose that you have a career choice to make:
  1. There is a “safe bet” available to you, which will yield a discounted lifetime income of $1,000,000.
  2. Alternatively, there is a risky bet, which will yield a discounted lifetime income of $100,000,000 with 10% probability, or a $200,000 lifetime income with 90% probability.
The expected value of Option 1 is $1,000,000. The expected value of Option 2 is (0.1 × $100,000,000) + (0.9 × $200,000) = $10,180,000. For a rational, risk-neutral agent, Option 2 is the right choice by a long-shot.

JSalk: colleague, hoarded credit, "made everyone else anonymous"

it is a competitive world

sea times

Nor did he credit Harvard researchers John Enders, Frederick Robbins and Thomas Weller, who enabled the vaccine to be mass-produced by finding a way to grow it in monkey kidney tissue.
"He wasn't very generous in acknowledging his co-workers, to put it in the most kind fashion," said Dr. Julius Youngner, who worked with Salk in Pittsburgh and is the only surviving scientist of the core research team. "He made the world think that he had done it all by himself and made everyone else anonymous."
Salk's demeanor embittered Youngner so much that he left the team in 1957 and told off Salk when Salk returned to Pittsburgh for a portrait unveiling in 1993.