I enjoyed this book - it is a delightful page-turner. I am also sympathetic to the main argument. The world is a messy, complicated place, and nice neat solutions, while seemingly satisfying, can have unintended consequences. But, perhaps fittingly, the book itself sometimes felt a bit messy, with only faint connections between the chapters and subjects. I recognised some of the serious ideas that lie behind many of the stories Hatford tells. But these ideas —upon inspection— are often distinct from each other. I haven’t quite decided whether pulling them together under the banner of “messy” is appropriate. Finally, I suspect that readers looking for advice on “how to succeed at life”, may be advised to look elsewhere.
Noah Smith: “Anti-empiricism is not humility”. And The Undercover Historian (Beatrice Cherrier): “How much do current debates owe to conflicting definitions of economics?”:
I’m thus left wondering to what extent current debates about the state of economics are nurtured by conflicting definitions of economics. Here’s my speculation: those economists who believe the shape of economics is good usually endorse the rational decision definition. Yet in the past decades, they have shifted toward a tool-box vision of their practices. They thus view interdisciplinarity as tool exchanges. Meanwhile, critics are pushing back toward a definition of economics that was in wide currency in the early XXth century, one concerned with understanding the economy as a system of production and distribution, one rooted in capitalist accumulation, technological change, etc. They believe economists should borrow from other scientists whatever models, concepts and theories will improve their understanding of how the economy works.
- Edward Tufte on “Displaying estimates +/- error, confidence bounds”.
Over the last three decades, most economists and central bankers have come to doubt the usefulness of money supply measures for conducting monetary policy, and have turned to macroeconomic models in which monetary aggregates have no role.
In a recent paper, using a specific, narrow monetary aggregate, M1, we study a dataset comprising 32 countries since the mid-19th century (Benati et al. 2016). The main finding of this large-scale investigation is that, contrary to conventional wisdom, in most cases statistical tests do identify with high confidence a long-run equilibrium relationship between either M1 velocity and a short-term interest rate, or M1, GDP, and a short rate – that is, a long-run money demand.
It was to be an intellectual paradise. What we got was…the blogosphere. Still a paradise of sorts! And free. But not a scientific paradise.
Sindre Sorhus: “Mac OS tips and tricks”
Dietrich Vollrath’s insightful discussion of the construction of capital output shares and the special role that owner-occupied housing plays in it:
The total amount of GDP getting paid to owners of homes is rising over time (Rognlie). But at the same time, the required rate of return on capital is falling (Barkai and BLS), which means that the profits on owner-occupied housing must be rising.
What do I mean by profits? Remember that these are economic profits, not accounting profits. Owners of homes are not seeing an increase in their cash flow. […]. Those economic profits are coming in the form of a higher imputed flow of GDP from my house over time. This implicit flow of value, a rent I’m charging myself, is getting cranked upwards over time, even if I don’t see it.
The implications of an increasing profit share coming from owner-occupied housing are a lot different from the implications of an increasing profit share coming from corporate market power or concentration.