MARS 8 2018

Kenneth Rogoff, Project Syndicate: Economists vs. Scientists on Long-Term Growth. Artificial intelligence researchers and conventional economists may have very different views about the impact of new technologies. Most economic forecasters have largely shrugged off recent advances in artificial intelligence (for example, the quantum leap demonstrated by DeepMind’s self-learning chess program last December), seeing little impact on longer-term trend growth. Such pessimism is surely one of the reasons why real (inflation-adjusted) interest rates remain extremely low, even if the bellwether US ten-year bond rate has ticked up half a percentage point in the last few months. If supply-side pessimism is appropriate, the recent massive tax and spending packages in the United States will likely do much more to raise inflation than to boost investment. But right now, and forgetting the possibility of an existential battle between man and machine, it seems quite plausible to expect a significant pickup in productivity growth over the next five years.

Anna Orlovskaya, Conor Sewell, BoE: Peer to Peer – Scale and Scalability. Peer to Peer (P2P) lending is a hot topic at Fintech events and has received a lot of attention from academia, journalists, various international bodies and regulators.  Following the Financial Crisis, P2P platforms saw an opportunity to fill a gap in the market by offering finance to customers and businesses struggling to get loans from banks.  Whilst some argue they will one day revolutionise the whole banking landscape, many platforms have not yet turned a profit.  So before asking if they are the future, we should first ask if they have a future at all. Problems such as a higher cost of funds, or limited ability to scale the business, may mean the only viable path is to become more like traditional banks.

Sendhil Mullainathan, NYT: The Hidden Taxes on Women. The working world is unfair to many women, yet even when they succeed, they must confront another series of challenges. Their hard-won successes are taxed in ways that men’s are not. The taxes I’m talking about aren’t paid in dollars and cents or imposed by the government. They take the form of annoyance and misery and are levied by individuals, very often by loved ones. Winning an election increases subsequent divorce rates for female candidates but not for men (This paper, like most of the social science literature, focuses on female-male partners.) These divorces are not the exclusive result of hard-fought campaigns. The study examined elections with very narrow margins of victories, in which winning was largely a matter of luck. These “lucky” winners also experienced higher divorce rates. Corporate success has similar consequences: Women who become chief executives divorce at higher rates than others.

Angus Deaton, NBER: What do Self-Reports of Wellbeing Say about Life-Cycle Theory and Policy? I respond to Atkinson's plea to revive welfare economics, and to considering alternative ethical frameworks when making policy recommendations. I examine a measure of self-reported evaluative wellbeing, the Cantril Ladder, and use data from Gallup to examine wellbeing over the life-cycle. I assess the validity of the measure, and show that it is hard to reconcile with familiar theories of intertemporal choice. I find a worldwide optimism about the future; in spite of repeated evidence to the contrary, people consistently but irrationally predict they will be better off five years from now. The gap between future and current wellbeing diminishes with age, and in rich countries, is negative among the elderly. I also use the measure to think about income transfers by age and sex. Policies that give priority those with low incomes favor the young and the old, while utilitarian policies favor the middle aged, and men over women.

Erika Check Hayden, Nature: Colossal family tree reveals environment’s influence on lifespan. Computational biologist Yaniv Erlich of Columbia University in New York City and his colleagues have used crowdsourced data to make a family tree that links 13 million people. The ancestry chart, described today in Science, is believed to be the largest verified resource of its kind — spanning an average of 11 generations. Erlich’s team analysed the birth and death dates of the people in this tree, and calculated whether individuals were more likely to have died at similar ages if they were closely related. The group concludes that heredity explains only about 16% of the difference in lifespans for these individuals. Most of the differences were down to other factors, such as where and how people lived.

Tim Harford, The Undercover Economist: Like great coffee, good ideas take time to percolate. Monmouth Coffee opened on Monmouth Street in London in 1978. It serves wonderful coffee and the queues often stretch out of the door. That is what makes what happened next so surprising. What happened next was: nothing. Data show that just because good ideas emerge does not mean that they spread quickly. Researchers at the OECD have concluded that within most sectors (for example, coal mining or food retail) there is a large and rising gap in productivity between the typical business and the 100 leading companies in the sector. The leading businesses are nearly 15 times more productive per worker, and almost five times more productive even after adjusting for their use of capital such as buildings, computers and machinery.

Jared A. Forrester, Thomas G. Weiser, Wilderness & Environmental Medicine: An Update on Fatalities Due to Venomous and Nonvenomous Animals in the United States (2008–2015). The Centers for Disease Control and Prevention Wide-Ranging Online Data for Epidemiologic Research database was queried to return all animal-related fatalities between 2008 and 2015. There were 1610 animal-related fatalities, with the majority from nonvenomous animals (2.8 deaths per 10 million persons). The largest proportion of animal-related fatalities was due to “other mammals,” largely composed of horses and cattle. Deaths attributable to Hymenoptera (hornets, wasps, and bees) account for 29.7% of the overall animal-related fatalities and have been steady over the last 20 years. Dog-related fatality frequencies are stable, although the fatality frequency of 4.6 deaths per 10 million persons among children 4 years of age or younger was nearly 4-fold greater than in the other age groups. Appropriate education and prevention measures aimed at decreasing injury from animals should be directed at the high-risk groups of agricultural workers and young children with dogs.