Tuesday, October 21, 2014

Misinformation, and the Drive for Income Equality

There’s new and provocative research out of Sweden entitled “Richer (and Holier) Than Thou? The Effect of Relative Income Improvements on Demand for Redistribution”.

… A vast majority of Swedes believe that they are poorer, relative to others, than they actually are. This is true across groups, but younger, poorer, less cognitively able and less educated individuals have perceptions that are further from reality.

To put it more bluntly, people pushing an agenda for income redistribution will have better luck if their target market is young, dumb, and ignorant.

Then the authors try a little social engineering:

… We conduct an experiment by randomly informing a subsample about their true relative income position. Respondents who learn that they are richer than they thought demand less redistribution and increase their support for the Conservative party.

Their evidence of this is based on before and after responses to survey questions, not actual voting records.

Wanna’ Work at Google? (Not Required)

From the Business Insider piece entitled “The One App You Need On Your Résumé If You Want A Job At Google" (read more: http://www.businessinsider.com/matlab-software-skills-needed-for-jobs-at-google-2014-10#ixzz3GniQv7jC).

Google's former svp/product management Jonathan Rosenberg was in London with chairman Eric Schmidt …

… Schmidt had some more down-to-earth advice. Google really needs data analytics people and folks who have studied statistics in college, he said.

Big data — how to create it, manipulate it, and put it to good use — is one of those areas in which Google is really enthusiastic about.

And then Rosenberg said something really interesting. If you want to work at Google, make sure you can use MatLab, he said.

And, who’s the only SUU professor who has experience with Matlab? Yours truly. I gave up trying to get funding to buy Matlab for SUU about 10 years ago … no one had any vision about what it would be used for.

FWIW: I wouldn’t even worry about Matlab just yet. In order to use Matlab you really need to have taken linear algebra. I wouldn’t even worry about linear algebra yet though. In order to take linear algebra, you need two semesters of calculus. And that’s not business calculus, or ECON 2500. So, there’s a plan: Calculus I, Calculus II, Linear Algebra, talk to Tufte about learning Matlab.

Sunday, October 19, 2014

This Is What an Expansion Feels Like

Two graphs from the Pew Research Center:

Americans may not be raging optimists when it comes to finding work — perhaps “skeptical realists” is closer to the mark — but their self-assessment of the job market tracks pretty closely with official unemployment statistics.

It’s been a long time coming, because, really, that was a very nasty recession a few years back. But … people’s perception of the availability of jobs is back in line with what it was during the middle parts of the Bush expansion (say around 2004), and he unemployment rate is back where it was in the early middle of the Bush expansion (say around 2003).

Via I Love Charts.

Saturday, October 18, 2014

Why Is Macro So Hard? “This Is the Worst Thing Ever. And We’re All Going to Die”

David Harsanyi hits a homer with “This Is the Worst Thing Ever. And We’re All Going to Die.” from The Federalist.

Most of this piece isn’t explicitly about macroeconomics. But it gets at the point that one of the things that makes thinking about macroeconomics and policy so hard is the breathless negativity which politicians the legacy media condition us with.

Thursday, October 16, 2014

Some African Countries Bump Up Their GDP

I think you have to take this with a grain of salt, but some African countries are improving and revising their GDP numbers, and coming up with results that suggest their economies are a lot bigger than we thought.

Some of this is no doubt political.

But, do keep in mind that GDP is notoriously badly measured in poor countries. So there’s also a big “it’s about time” attitude that we should have towards better numbers.

And also, it’s a very good sign of improved economic activity that the governments of these countries can find the money to even consider doing this. Even if they’re fibbing about some of the numbers, it’s a costly undertaking that they wouldn’t do lightly.

Read the whole thing, entitled “Africa’s GDP Is Bigger Than You Think” in Bloomberg Businessweek.

Dentistry as an Economic Indicator

Bloomberg Businessweek has a piece this week entitled “The Dental Index Suggests Economic Pain Ahead”.

They provide some evidence from data on dental work and dental practices suggesting that the economy may be near its peak.

Of course, you always need to keep in mind that the problem with forecasting turning points if false positives, so this may not turn out to be anything.

Sunday, October 12, 2014

How Technology Makes More Effective Labor

In growth theory, we learn that labor is the hours we put in. Capital is the depreciable tools that make those hours more productive. Technology is the non-depreciable ideas that make us act like we have more virtual hours than actual hours.

This is effective labor. One way technology does this is by allowing us to control more pieces of capital at the same time.

Consider this video about how the desktop has evolved over the last 30 years: