Let parents pay to take kids out of school

Elementary school kids can miss a day of school. If they are doing something wholesome and constructive on their day off, no one would claim that it hurts the child who is doing the alternate activity.

Does it hurt other people? There is an ungated section of this Matt Yglesias post concluding that when rich people pull their kids out of school it “… ultimately harms less-privileged children.” For now, assume that is true. We could internalize the externality, like surge pricing on toll roads. Let parents pay a fine to take their kids out of school. The fine would fund programs that help everyone. Let parents pay back into the public good. Charge $25/day which could go toward buying classroom supplies for the inconvenienced teacher.

This flexibility might lead to richer families keeping their kids in conventional schools, which seems like a good thing. No one would have to pay the fine. There is and would still be a system for excusing absences due to unavoidable things like surgery.

Requiring a doctor’s note for excused absences is already a tax. Requiring a parent to miss half a day of work to go take a child to the doctor is more punishing than paying a $25 fine, for many families.

The fine could even increase with the number of missed days. Only super rich families would be able to afford to take 2 children on a 3-week trip. I wouldn’t be able to afford it. But I wouldn’t mind if our school generated revenue off of those who can. Those people would probably donate a new playground in exchange for a plaque.

Is another example where it would be reasonable to charge people to not use something? In a way, insurance companies try to fine people for not using the gym. Running with this example, paid private schools could easily call this a tuition reimbursement for high attendance. Unfortunately, I think it would be politically impossible to implement in public schools.

Videos for Teaching Inflation in 2024

I’m teaching principles of macro this semester. Making macroeconomics sound important to students is partly about explaining that recessions are painful and significant.

As Alex Tabarrok says, “The Great Depression is Over!”  Maybe Gen Z can appreciate the significance of the Great Depression, but it is history. Gen Z has heard of the Great Recession, but keep in mind that a student who is 20-y-o in 2024 was 4 in 2008. It’s a weird one, but there has been a recession more recently. The Covid Recession is what I like to link to, when possible, in class.

To teach the inflation chapter this week, I’m using video clips that I’ll put up here as resources for others.

To start off the inflation chapter and bring in a more global perspective, I show: “Zimbabwe’s inflation rate hits triple digits”  This 2-minute news clip was produced by Al Jazeera. They talk about lending and policy in addition to retail price increases.

After we have gone through some definitions, I show two clips of an economic forecast that was recorded in 2021. I don’t usually show such long clips in class, but I’m relying on dramatic irony to make it interesting. The students know the path that inflation took from 2020 to 2024, but Dr. Doti in the video does not. I stop the video occasionally to point out connections to our textbook.

Chapman University’s 2021 Economic Forecast Update was presented virtually on Wednesday, June 16, 2021.

Dr. Jim Doti predicts that an unprecedented increase in the money supply after Covid will lead to inflation. He’s not right about everything, but that’s what makes it so interesting. Right after showing students the quantity theory of money equation, I can show them someone trying to apply it from about minute 25 to about minute 35. (don’t start the video from minute 1)

Then, I go back to my lecture and introduce the Fisher effect. Next, we watch about minute 38 to minute 43 of the 2021 forecast because of the direct connection of inflation to interest rates. Partly this just helps illustrate how messy the real world is.

Also, I pull from one of Jeremy’s 2023 posts to illustrate the long run neutrality of money. “The Rate of Inflation is Falling, But Prices are Still Rising (And So are Wages)

Books the 8-year-old likes

One of my personal interests is encouraging my kids to read. This is a list of books that my 8-year-old son really likes.

If you count Calvin and Hobbes as reading (it’s a comic book), then it is his first love and continues to be a favorite.  

Calvin and Hobbes (Volume 1) Paperback

The Calvin and Hobbes Lazy Sunday Book (Volume 4)

These next two are STEM-friendly goofy books with lots of pictures to break up the text. Currently, if he has to do independent reading time, these are first choices.

Big Bangs and Black Holes: A Graphic Novel Guide to the Universe

The 39-Story Treehouse

These chapter books are prime read-aloud choices for us to read to him that hold his interest.

The Phantom Tollbooth

The Silver Chair

Ender’s Game – Still incredible. Still feels futuristic, although the emphasis on “smart desks” instead of “smart phones” is funny. It was published in 1985.

The Great Brain

Bonus, for 5-year-olds:

The 5-year-old picked out “Woodpecker Wants a Waffle” at our local library and has been delighted by it. It’s a funny picture book that holds up to re-reads. See if your library has it. Public libraries are especially great for 5-year-olds who are ready to explore beyond the Dr. Suess classics at home but also not able to commit to any books worth buying.

Programmer Pain in Memes

Memes communicate a lot of information, yet they are rarely preserved and explained.

It is February 2024. A friend of mine who works in tech just posted a fleet of funny memes about his job.

I have written a research paper and a policy paper about job selection into tech.

Research paper: “Willingness to be Paid: Who Trains for Tech Jobs?

I found that enjoyment or subjective preferences are underrated in the policy literature on the skills gap and promoting STEM in America. In a presentation in the Spring of ’23, I speculated that ChatGPT or other AI-assisted coding tools would make coding less tedious and therefore more fun.

I observe in this set of memes (posted in February 2024) that ChatGPT is already embedded in coding life, and yet it does not feel like anything fundamental has changed. Workers still Google their own way to solutions (although surely that has diminished somewhat due to LLMs). The work still feels hard and the workers still feel undervalued.

Senior programmers today would have grown up working very closely with search engines, largely to harvest the vast knowledge contained in tech message boards. I myself use that tool often when I have to program. Part of learning to code is just learning how to get help. This requires a certain mindset that is different from what is traditionally taught in school.
Many such cases.
Many people who end up as programmers want to do better. They are driven to write clean sensible code. A common theme is frustration that the product does not match the vision. This sentiment comes up more frequently than I have seen in other professions. The work they do is truly hard, and they are rarely afforded enough time to do it “right.”
Continue reading

Tyler Supporting Women in the GOAT book

Ladies, Tyler Cowen has done us a solid. He included John Stuart Mill as a contender for the greatest economist of all time in large part because of his insights on gender equality.

I’m short on time at the moment. I’d like to do a better job than this, with more nuance about Hayek, but here’s the most I can do this week:

More here: “John Stuart Mill on women, as explained by TC

Or read the (free) GOAT book. I might say you should just jump to the Mill chapter, but it makes more sense in context if you read the whole thing.

Taylor Swift to the Super Bowl with AdamSmithWorks

I had some fun with my favorite editor Christy Horpedahl.

WOULD ADAM SMITH TELL TAYLOR SWIFT TO ATTEND THE SUPER BOWL?

Have you been told that economists only care about money? If anyone would tell Taylor Swift to focus on her own career, you might think it would be the most famous economist of all, Adam Smith. But AdamSmithWorks fans already know that Adam Smith was concerned with the whole person. So, would Adam Smith advise Taylor Swift to rush back to America after an exhausting concert just to cheer on a man in a football game? 

Click the link and find out!

Does GPT-4 Know How High the Alps Are?

I’m getting ready to give some public local talks about AI. Last week I shared some pictures that I think might help people understand ChatGPT, specifically:

My first thought is that GPT-4 was giving incorrect estimates of the heights of these mountains because it does not actually “know” the correct elevations. But then a nagging question came to mind.

GPT has a “creativity parameter.” Sometimes, it intentionally does not select the top-rated next word in a sentence, for example, in order to avoid being stiff and boring. Could GPT-4 know the exact elevation of these mountains, and it is just intentionally being “creative,” in this case?

I do not want to stand up in front of the local Rotary Club and say something wrong. So, I went to a true expert, Lenny Bogdonoff, to ask for help. Here is his reply:

Not quite. It’s not that it knows or doesn’t know, but based on the prompt, it’s likely unable to parse the specific details and is outputting results respectively. There is a component of stochastic behavior based on what part of the model weights are activated.

One common practice to help avoid this and see what the model does grasp, is to ask it to think step by step, and explain its reasoning. When doing this, you can see the fault in logic.

All that being said, the vision model is actually faulty in being able to grasp the relative position of information, so this kind of task will be more likely to hallucinate.

There are better vision models, that aren’t OpenAI based. For example Qwen-VL-Max is very good, from the Chinese company Alibaba. Another is LLaVA which uses different baselines of open source language models to add vision capabilities

Depending on what you are needing vision for, models can be spiky in capability. Good at OCR but bad at relative positioning. Good at classifying a specific UI element, but bad at detecting plants, etc etc. 

Joy: So, I think I can tell the Rotary Club that GPT was “wrong” as opposed to “intentionally creative.” I think, as I originally concluded, you should not make ChatGPT the pilot of your airplane and go to sleep when approaching the Alps. ChatGPT should be used for what it is good at, such as writing the rough draft of a cover letter. (We have great “autopilot” software for flying planes, already, without involving large language models.)

Another expert, Gavin Leech, also weighed in with some helpful background information:

  • the creativity parameter is known as temperature. But you can actually radically change the output (intelligence, style, creativity) by using more complicated sampling schemes. The best analogy for changing the sampling scheme is that you’re giving it a psychiatric drug. Changing the prompt, conversely, is like CBT or one of those cute mindset interventions.
  • For each real-name model (e.g. “gpt-4-0613”), there’s 3 versions: the base model (which now no one except highly vetted researchers have access to), the instruction-tuned model, and the RLHF (or rather RLAIF) model. The base model is wildly creative, unhinged, but the RLHF one (which the linked researchers use) is heavily electroshocked into not intentionally making things up (as Lenny says).
  • It’s currently not usually possible to diagnose an error – the proverbial black box. My friends are working on this though
  • For more, note OpenAI admitting the “laziness” of their own models. the Turbo model line is intended to fix this.

Thank you, Lenny and Gavin, for donating your insights.

How ChatGPT works from geography and Stephen Wolfram

By now, everyone should consider using ChatGPT and be familiar with how it works. I’m going to highlight resources for that.

My paper about how ChatGPT generates academic citations should be useful to academics as a way to quickly grasp the strengths and weakness of ChatGPT. ChatGPT often works well, but sometimes fails. It’s important to anticipate how it fails. Our paper is so short and simple that your undergraduates could read it before using ChatGPT for their writing assignments.

A paper that does this in a different domain is “GPT4GEO: How a Language Model Sees the World’s Geography” (Again, consider showing it to your undergrads because of the neat pictures, but probably walk through it together in class instead of assigning it as reading.) They describe their project: “To characterise what GPT-4 knows about the world, we devise a set of progressively more challenging experiments… “

For example, they asked ChatGPT about the populations of countries and found that: “For populations, GPT-4 performs relatively well with a mean relative error (MRE) of 3.61%. However, significantly higher errors [occur] … for less populated countries.”

ChatGPT will often say SOMETHING, if prompted correctly. It is often, at least slightly, wrong. This graph shows that most estimates of national populations were not correct and the performance was worse on countries that are less well-known. That’s exactly what we found in our paper on citations. We found that very famous books are often cited correctly, because ChatGPT is mimicking other documents that correctly cite those books. However, if there are not many documents to train on, then ChatGPT will make things up.

I love this figure from the geography paper showing how ChatGPT estimates the elevations of mountains. This visual should be all over Twitter.

There are 3 lines because they did the prompt three times. ChatGPT threw out three different wrong mountains. Is that kind of work good enough for your tasks? Often it is. The shaded area in the graph is the actual topography of the earth in those places. ChatGPT “knows” that this area of the world is a mountain. But it will just put out incorrect estimates of the exact elevation, instead of stating that it does not know the exact elevation of those areas of the world.

Another free (long, advanced) resource with great pictures is Stephen Wolfram’s 2023 blog article “What Is ChatGPT Doing … and Why Does It Work?” (YouTube version)

The first thing to explain is that what ChatGPT is always fundamentally trying to do is to produce a “reasonable continuation” of whatever text it’s got so far, where by “reasonable” we mean “what one might expect someone to write after seeing what people have written on billions of webpages, etc.

If you feel like you already are proficient with using ChatGPT, then I would recommend Wolfram’s blog because you will learn a lot about math and computers.

Scott wrote “Generative AI Nano-Tutorial” here, which has the advantage of being much shorter than Wolfram’s blog.

EDIT: New 2023 overview paper (link from Lenny): “A Survey of Large Language Models

Intelligence for School Closing

I don’t have much time to write this week because I lost so many work hours to schools closing for “weather.”

Tyler has been saying that we should welcome more intelligence (in the form of LLMs – I’m not getting any smarter). What would we want intelligence for? How about reducing the error rate on school closing?

First, I will recognize that things are already getting better due to computers. The internet and texting and radar help. Compared to when I was a child in New Jersey, it’s more efficient to text all the parents the night before, as opposed to having people get up at 6am to scan the radio for news. Weather forecasting has presumably gotten better.

Now my rant: Right around what was already a three-day official weekend, school was closed three times. Even my kids were irate when that last day was announced. In my opinion, only one of those closures was justified for extreme weather.

There is a lot of dumb in a city. People complain about routine processes being suboptimal. It would be great if we humans could figure out ways to apply more intelligence to these local problems and make less mistakes.

This is a joke for any readers in cold climates. My Alabama kids thought it was fun to collect icicles because they have almost never seen them before.

Teaching Resource: List of Econ Podcasts for Spring 2024

In addition to all the usual items for a principles of macroeconomics class, I’m asking my students to listen to one podcast episode this semester. They have to write a short summary on a discussion board for credit.

It took me a bit of time to collect this list of links. I also give them some discretion to find their own episode, but I’m not posting my rules on that point here. This list is something you can copy, paste, and modify. The point is to have all the web links in one place so that students can just click around. There have been many great podcasts over past 2 decades, but I list relatively new content so that we get a bit of “current events” thrown in. So, even if you’ve assigned podcasts before, this new list might be helpful.

Re-release: Claudia Goldin on the Economics of Inequality
Conversations with Tyler
https://cowenconvos.libsyn.com/re-release-claudia-goldin-on-the-economics-of-inequality
https://podcasts.apple.com/us/podcast/re-release-claudia-goldin-on-the-economics-of-inequality/id983795625?i=1000630726259

Reid Hoffman on the Possibilities of AI
Conversations with Tyler
https://cowenconvos.libsyn.com/reid-hoffman-0
https://podcasts.apple.com/us/podcast/reid-hoffman-on-the-possibilities-of-ai/id983795625?i=1000618616078

Simon Johnson on Banking, Technology, and Prosperity
Conversations with Tyler
https://cowenconvos.libsyn.com/simon-johnson
https://podcasts.apple.com/us/podcast/simon-johnson-on-banking-technology-and-prosperity/id983795625?i=1000613373427

Tom Holland on History, Christianity, and the Value of the Countryside
Conversations with Tyler
https://podcasts.apple.com/us/podcast/tom-holland-on-history-christianity-and-the/id983795625?i=1000605361914
https://cowenconvos.libsyn.com/tom-holland

Brad DeLong on Intellectual and Technical Progress
Conversations with Tyler
https://cowenconvos.libsyn.com/brad-delong
https://podcasts.apple.com/us/podcast/brad-delong-on-intellectual-and-technical-progress/id983795625?i=1000601069514

Mark Carney on Central Banking and Shared Values
Conversations with Tyler
https://cowenconvos.libsyn.com/mark-carney
https://podcasts.apple.com/us/podcast/mark-carney-on-central-banking-and-shared-values/id983795625?i=1000523160780

EconTalk Episodes
Tyler Cowen on the GOAT of Economics
https://simplecast.econtalk.org/episodes/tyler-cowen-on-the-goat-of-economics

Jennifer Burns on Milton Friedman
https://simplecast.econtalk.org/episodes/jennifer-burns-on-milton-friedman

Michael Munger on How Adam Smith Solved the Trolley Problem
https://simplecast.econtalk.org/episodes/michael-munger-on-how-adam-smith-solved-the-trolley-problem

Daron Acemoglu on Innovation and Shared Prosperity
https://simplecast.econtalk.org/episodes/daron-acemoglu-on-innovation-and-shared-prosperity

Michael Munger on Industrial Policy
https://simplecast.econtalk.org/episodes/michael-munger-on-industrial-policy

Macro Musings Episodes
Tyler Cowen on the Greatest Economist of All Time and Other Macro Awards
https://macromusings.libsyn.com/tyler-cowen-on-the-greatest-economist-of-all-time-and-other-macro-awards

Nicolas Cachanosky on Dollarization in Argentina
https://macromusings.libsyn.com/nicolas-cachanosky-on-dollarization-in-argentina

Charlie Evans on the Past, Present, and Future of U.S. Monetary Policy
https://macromusings.libsyn.com/charles-evans-on-the-past-present-and-future-of-us-monetary-policy

Shruti Rajagopalan started a new podcast called Ideas of India. 
https://www.mercatus.org/ideasofindia

Or you can listen to Shruti here: https://www.mercatus.org/hayekprogram/hayek-program-podcast/peter-boettke-austrian-economics-and-knowledge-problem-pt-1

Women in Economics Podcast from the St. Louis Fed
Women in Economics: Isabel Schnabel
https://www.stlouisfed.org/timely-topics/women-in-economics/isabel-schnabel

Women in Economics: Heidi Hartmann
https://www.stlouisfed.org/timely-topics/women-in-economics/heidi-hartmann

Women in Economics: Stephanie Aaronson
https://www.stlouisfed.org/timely-topics/women-in-economics/stephanie-aaronson

Women in Economics: Christina Romer, Janice Eberly and Shelly Lundberg
https://www.stlouisfed.org/timely-topics/women-in-economics/romer-eberly-lundberg