MARS 15 2018

Aakash Mankodi, Tim Pike, BoE: Can central bankers become Superforecasters? Tetlock and Gardner’s acclaimed work on Superforecasting provides a compelling case for seeing forecasting as a skill that can be improved, and one that is related to the behavioural traits of the forecaster. These so-called Superforecasters have in recent years been pitted against experts ranging from U.S intelligence analysts to participants in the World Economic Forum, and have performed on par or better by accurately predicting the outcomes of a broad range of questions. Sounds like music to a central banker’s ears? In this post, we examine the traits of these individuals, compare them with economic forecasting and draw some related lessons. We conclude that considering the principles and applications of Superforecasting can enhance the work of central bank forecasting.

Benjamin Austin, Edward Glaeser, Lawrence Summers, Brookings Papers on Economic Activity:Saving the heartland: Place-based policies in 21st Century America. America’s regional disparities are large and regional convergence has declined if not disappeared. This wildly uneven economic landscape calls for a new look at spatially targeted policies. There are three plausible justifications for place-based policies–agglomeration economies, spatial equity and larger marginal returns to targeting social distress in high distress areas. The second justification is stronger than the first and the third justification is stronger than the second. The enormous social costs of non-employment suggest that fighting long-term joblessness is more important than fighting income inequality. Stronger tools, such as spatially targeted employment credits, may be needed in West Virginia than in San Francisco.

Philippe Aghion, Benedicte Berner, Project Syndicate: Macron’s Education Revolution. Up to now, students have been placed in universities through a lottery system, which often fails to match students with the right school or discipline. But after Macron’s reforms are implemented, students’ school performance and preferred subjects will become the determining factors in university placement. The final exam, the baccalauréat, will focus on two major subjects, two minor subjects, and an oral exam, instead of covering 10-15 disparate topics. To reduce the failure rate at the bachelor-degree level, the reforms will also introduce university pre-requisites, rather than guaranteeing eligibility for all. All of this will align France more closely with countries such as Sweden and Germany, where unemployment is far lower.

Joseph J. Sabia, Taylor Mackay, Thanh Tam Nguyen, Dhaval M. Dave, NBER: Do Ban the Box Laws Increase Crime? Ban-the-box (BTB) laws, which prevent employers from asking prospective employees about their criminal histories at initial job screenings, have been adopted by 25 states and the District of Columbia. Using data from the National Incident-Based Reporting System, the Uniform Crime Reports, and the National Longitudinal Survey of Youth 1997, this study is the first to estimate the effect of BTB laws on crime. We find some evidence that BTB laws are associated with an increase in property crime among working-age Hispanic men. This finding is consistent with employer-based statistical discrimination as well as potential moral hazard. A causal interpretation of our results is supported by placebo tests on policy leads and a lack of BTB-induced increases in crime for non-Hispanic whites and women. Finally, we find that BTB laws are associated with a reduction in property crime among older and white individuals, consistent with labor-labor substitution toward those with perceived lower probabilities of having criminal records (Doleac and Hansen 2017).

Henry Sauermann, Chiara Franzoni, Kourosh Shafi, NBER: Crowdfunding Scientific Research. Crowdfunding may provide much-needed financial resources, yet there is little systematic evidence on the potential of crowdfunding for scientific research. We first briefly review prior research on crowdfunding and give an overview of dedicated platforms for crowdfunding research. We then analyze data from over 700 campaigns on the largest dedicated platform, Experiment.com. Junior investigators are more likely to succeed than senior scientists, and women have higher success rates than men. Conventional signals of quality - including scientists' prior publications - have no relationship with funding success, suggesting that the crowd applies different decision criteria than traditional funding agencies. Our results highlight significant opportunities for crowdfunding in the context of science while also pointing towards unique challenges. We relate our findings to research on the economics of science and on crowdfunding, and we discuss connections with other emerging mechanisms to involve the public in scientific research.

Amnon Cavari, Guy Freedman, The Journal of Politics: Polarized Mass or Polarized Few? Assessing the Parallel Rise of Survey Nonresponse and Measures of Polarization. In this study, we argue that the perceived polarization of Americans along party lines is partially an artifact of the low response rates that characterize contemporary surveys. People who agree to participate in opinion surveys are more informed, involved, and opinionated about the political process and therefore hold stronger, more meaningful, and partisan political attitudes. This motivational discrepancy generates a bias in survey research that may amplify evidence of party polarization in the mass public. We test the association between response rates and measures of polarization using individual-level data from Pew surveys from 2004 to 2014 and American National Election Studies from 1984 to 2012. Our empirical evidence demonstrates a significant decline in unit response that is associated with an increase in the percentage of politically active, partisan, and polarized individuals in these surveys. This produces evidence of dissensus that, on some issues, may be stronger than exists in reality.

Nima Sanandaji, CATO: The Nordic Glass Ceiling. Welfare policies, high taxes that make it costly to purchase substitutable services, generous benefit systems that reduce economic incentives for full-time work, public-sector monopolies/oligopolies in female-dominated sectors, and paid-leave policies that incentivize long breaks from working life prevent women from reaching the top. Taken together, these policies create a Nordic glass ceiling. Gender quotas are unable to make up the difference, even though politicians routinely point to gender quotas as a policy success story. In reality they fall short of their objectives. It is true that Nordic countries have high female employment rates and an unusually gender-equal history and gender-equal values, and these achievements merit admiration. Still, the proportion of women managers, executives, and business owners is disappointingly low.

Ali Alizadeh, The Conversation: Friday essay: Joan of Arc, our one true superhero. In my view, Jeanne d’Arc, despite living a good 350 years before the advent of the modern revolution, is an exemplary materialisation of the figure of the revolutionary. Long before Robespierre, Marx, Lenin, Luxemburg and Guevara, Jeanne the Maid of Orléans committed herself to the cause of transforming the world from the bottom up. She fought for justice in the direction of a universal collectivity – a very early, very nascent notion of a unified nation under the rule of one sovereign – and not in the interest of a particular identitarian or sectarian grouping. In the medieval, pre-modern heroine, we find a pre-emptive inversion of the mantras of the “progressive”, reformist, non-revolutionary bourgeois activists of postmodernity. For Jeanne the Maid, the public was the personal, and not merely the other way around. She made the world be the change that she wanted to see in herself. She thought local and acted global