David Autor, David
Dorn, Gordon H. Hanson, Gary Pisano, Pian Shu, NBER: Foreign Competition and
Domestic Innovation: Evidence from U.S. Patents. Manufacturing is the locus of U.S. innovation,
accounting for more than three quarters of U.S. corporate patents. The rise of
import competition from China has represented a major competitive shock to the
sector, which in theory could benefit or stifle innovation. In this paper we
empirically examine how rising import competition from China has affected U.S.
innovation. We confront two empirical challenges in assessing the impact. We
map all U.S. utility patents granted by March 2013 to firm-level data using a
novel internet-based matching algorithm that corrects for a preponderance of
false negatives when using firm names alone. And we contend with the fact that
patenting is highly concentrated in certain product categories and that this
concentration has been shifting over time. Accounting for secular trends in
innovative activities, we
find that the impact of the change in import exposure on the change in patents
produced is strongly negative. It remains so once we add an extensive set of
further industry- and firm-level controls. Rising import exposure also reduces
global employment, global sales, and global R&D expenditure at the firm
level. It would appear that a simple mechanism in which greater foreign
competition induces U.S. manufacturing firms to contract their operations along
multiple margins of activity goes a long way toward explaining the response of
U.S. innovation to the China trade shock.
Dave Donaldson,
Microeconomic Insights: Economic benefits of transportation infrastructure:
historical evidence from India and America. Recent research finds that the economic benefits of transportation
infrastructure investment can be significant. To measure some of these benefits
I analyzed two of the most ambitious transportation projects in history: the
building of the vast railroad system in India by the British government from
1870 to 1930 and the dramatic expansion of the railroad network in America from
1870 to 1890. Railroad infrastructure reduced trade costs and increased the
shipment of goods. When observing the railroad network in India, I estimated
that in a typical district, the arrival of railroad access caused real Gross
Domestic Product (GDP) in the agricultural sector (the largest sector of
India’s economy at that time) to increase by around 17 percent. My estimates
with my colleague, Richard Hornbeck, imply that a counterfactual 1890 U.S.
economy without railroads would have seen a 60 percent reduction in the value
of aggregate farmland. While
these are only two historical case studies, and extrapolating from them to a
full understanding of the returns of modern-day investments cannot be done
without great care, these lessons from history teach us not to underestimate
the economic benefits of transportation infrastructure.
Scott Alexander,
Slate Star Codex: Considerations On Cost Disease. My impression is that most people still don’t know
about cost disease, or don’t realize the extent of it. So I thought I would
make the case for the cost disease in the sectors health care and education –
plus a couple more. Per student spending has increased about 2.5x in the past
forty years even after adjusting for inflation. At the same time, test scores
have stayed relatively stagnant. High school students’ reading scores went from
285 in 1971 to 287 today – a difference of 0.7%. The cost of health care has
about quintupled since 1970. It’s actually been rising since earlier than that,
but I can’t find a good graph; it looks like it would have been about $1200 in
today’s dollars in 1960, for an increase of about 800% in those fifty years. This time I can’t say with 100% certainty that all this extra spending
has been for nothing. Life expectancy has gone way up since 1960. We could tell
a story like this to explain rising costs in education, health care, etc. If
technology increases productivity for skilled laborers in other industries,
then less susceptible industries might end up footing the bill since they have
to pay their workers more. There’s
only one problem: health care and education aren’t paying their workers more;
in fact, quite the opposite. What’s happening? I don’t know
and I find it really scary.
Tyler Cowen,
Bloomberg: Feisty, Protectionist Populism? New Zealand Tried That. What would you think of a Western democratic leader
who was populist, obsessed with the balance of trade, especially effective on
television, feisty and combative with the press, and able to take over his
country’s right-wing party and swing it in a more interventionist direction? Meet
Robert Muldoon, prime minister of New Zealand from 1975 to 1984. For all the
comparisons of President Donald Trump to Mussolini or various unsavory Latin
American leaders, Muldoon is a clearer parallel case. Some of the similarities
are striking. Muldoon often made rude or unusually frank comments about foreign
leaders (including U.S. President Jimmy Carter and the Australian prime
minister), and his diplomats worked hard to undo them. When Muldoon spoke, he
so often made the issue about him. His slogan was “New Zealand -- The Way You
Want It.” One lesson from
the comparison is that a leader like Muldoon can be fairly popular, as he
stayed in power from 1975 to 1984, winning three terms despite mistakes,
antagonisms and policy failures. He was a plain-speaker who related well to
many Kiwi voters, and he was masterful at defusing or rechanneling opposition
within his own party.
Andreas Bergh,
Milken Institute Review: The Swedish Economy. Triumph of Social Democracy — or
Serendipity? By now, the debate regarding
the Swedish model had shifted. Chronic economic problems (especially slow
productivity growth) were now seen as proof that socialism didn't work – not
even in Sweden. A new center-right government was elected in 1991, and this
time the mandate was to make fundamental changes in the Swedish model, rather
than to polish the one that Sweden had long embraced. In some areas the
government succeeded; in others it hit a wall of resistance. Simply put,
competition and economic freedom increased in many areas of the Swedish
economy. But key areas, notably the labor market and the housing market,
remained highly regulated. The
winding road Sweden has taken has made it difficult to say whether being more
like Sweden involves increasing taxes and government intervention in the
economy – or whether it means liberalization, deregulation and welfare-state
retrenchment. So, before other countries try too hard to become more like
Sweden, it is wise to look back at how Sweden came to be Sweden. The
answers may surprise you – they certainly surprise a lot of Swedes.
Robert Frank, NYT:
Why Aren’t There More Female Billionaires? Women have been rapidly climbing the employment and wage ladders in
recent decades. But only a small fraction have made it to the top rungs — and
their progress may be slowing. New research shows that after making big strides in the 1980s and ’90s,
the number of women breaking into the top 1 percent of earners has stalled.
Women account for only 16 percent of the 1 percent, a number that has remained
essentially flat over the past decade, according to a paper by three
economists. And they account for only 11 percent of the top 0.1 percent of
earners.
Dan Jones, Nature:
Cognitive science: Dennett rides again. As Dennett and others argue, genetic evolution is not enough to
explain the skills, power and versatility of the human mind. Over the past
10,000 years, human behaviour and our ability to manipulate the planet have
changed too quickly for biological evolution to have been the driving force. In
Dennett's view, our brains
turned into fully fledged modern minds thanks to cultural memes: 'ways of
behaving' — pronouncing a word this way, dancing like so — that can be copied,
remembered and passed on. Some memes are better than others at getting passed
on. This drives natural selection, fashioning memetic design without a designer.
No comments:
Post a Comment