DECEMBER 14 2017

Michael Anson, David Bholat, Miao Kang and  Ryland Thomas, BoE: Looking inside the ledgers: the Bank of England as a Lender of Last Resort. The Bank’s generosity fell unevenly— typically the top fifth of borrowers received over three-fourths of the amounts lent. However, we have found no evidence that the Bank preferred lending to its existing customers i.e. those who held current accounts with the Bank’s Drawing Office, versus others. In sum, we find that the Bank developed into a textbook lender of last resort over the course of the three great crises of the mid-nineteenth century. Strikingly, it did so before Bagehot wrote his canonical text. But our paper barely scratches the surface of the historical treasures buried below Threadneedle Street in the Bank’s archives.

John Haltiwanger, Henry Hyatt, and Erika McEntarfer, NBER Digest: Who Moves Up the Job Ladder? We examine demographic patterns in job ladder mobility over the business cycle. Upward movement of workers on a "job ladder" from low-productivity to high-productivity firms is heavily dependent on the business cycle. During booms, net employment at high-productivity firms grows faster than at low-productivity firms, resulting in workers moving up the ladder. During busts, these upward job-to-job changes essentially stop. Net employment flows are instead driven by layoffs, with low-productivity firms losing comparatively more workers than their higher-productivity counterparts.

Barry Eichengreen, Project Syndicate: Two Myths About Automation. While many people believe that technological progress and job destruction are accelerating dramatically, there is no evidence of either trend. In reality, total factor productivity, the best summary measure of the pace of technical change, has been stagnating since 2005 in the US and across the advanced-country world.

Katja Mann, Lukas Püttmann, VOX EU: Benign effects of automation: New evidence from patent texts. Researchers disagree over whether automation is creating or destroying jobs. This column introduces a new indicator of automation constructed by applying a machine learning algorithm to classify patents, and uses the result to investigate which US regions and industries are most exposed to automation. This indicator suggests that automation has created more jobs in the US than it has destroyed.

Thomas Piketty, Le Monde: Trump, Macron: same fight. It is customary to contrast Trump and Macron: on one hand the vulgar American businessman with his xenophobic tweets and global warming scepticism; and on the other, the well-educated, enlightened European with his concern for dialogue between different cultures and sustainable development. All this is not entirely false and rather pleasing to French ears. But if we take a closer look at the policies being implemented, one is struck by the similarities. In particular, Trump, like Macron, has just had very similar tax reforms adopted. In both cases, these constitute an incredible flight in the direction of fiscal dumping in favour of the richest and most mobile.

James R. Flynn, Michael Shayer, Science Direct: IQ decline and Piaget: Does the rot start at the top? The IQ gains of the 20th century have faltered. Losses in Nordic nations after 1995 average at 6.85 IQ points when projected over thirty years. On Piagetian tests, Britain shows decimation among high scorers on three tests and overall losses on one. The US sustained its historic gain (0.3 points per year) through 2014. The Netherlands shows no change in preschoolers, mild losses at high school, and possible gains by adults. When a later cohort is compared to an earlier cohort, IQ trends vary dramatically by age. Piagetian trends indicate that a decimation of top scores may be accompanied by gains in cognitive ability below the median. They also reveal the existence of factors that have an atypical impact at high levels of cognitive competence. Scandinavian data from conventional tests confirm the decimation of top scorers but not factors of atypical impact. Piagetian tests may be more sensitive to detecting this phenomenon.

Woodley of Menie, Michael A., APA PsycNET: What Causes the Anti-Flynn Effect? A Data Synthesis and Analysis of Predictors. Anti-Flynn effects (i.e., secular declines in IQ) have been noted in a few countries. Much speculation exists about the causes of these trends; however, little progress has been made toward comprehensively testing these. A synthetic literature search yielded a total of 66 observations of secular IQ decline from 13 countries, with a combined sample size of 302,234 and study midyears spanning 87 years, from 1920.5 to 2007.5. Multilevel modeling (MLM) was used to examine the effect of study midyear, and (after controlling for this and other factors) hierarchical general linear modeling (GLM) was used. The MLM revealed that the anti-Flynn effect has strengthened in more recent years. Index of Biological State was not a significant predictor; however immigration predicted the decline, indicating that high levels of immigration promote the anti-Flynn effect.