- Networking remains underrated, even though people talk about it. I think it’s underrated because when people do a good job with it they don’t notice that they are doing it. Whereas, you don’t, for example, teach a class and not notice that you did it.
- I’m reading Hillbilly Elegy in paperback. With the new edition in hand, what I noticed first was the pages of breathless reviews from every outlet you could ever want praise from (NYT, WSJ, Vox, Rolling Stone, etc.). How did he do it? Did “they” come to him? Did he go to them? What on earth happened? See above point #1. Halfway in, I agree with the blurb from The Atlantic that it is a “beautiful memoir.” Although I’m sorry not to be supporting independent bookstores more, my strategy these days is to buy used paperbacks through Amazon. The books themselves are nearly free and shipping still costs less than Kindle. (This is how AI can help us reduce trash – get the stuff we have already manufactured to the people who want it.)
- “Fewer students are benefiting from doing their homework: an eleven-year study” Via LinkedIn post by Ethan Mollick. Students might even learn less from homework if they use ChatGPT. Relatedly, SAT standards might be declining even if scores are not.
- Shruti Rajagopalan discusses talent in India
- “The rise of cultural Christianity” (The New Statesman) via Sam Enright
Author: Joy Buchanan
Top EWED Posts of 2024
The following are notable posts from 2024, in descending order by the number of views this year.
- Young People Have a Lot More Wealth Than We Thought Jeremy Horpedahl was first to this scene. American Millennials, on average, have money. Perhaps this is becoming common knowledge now among folks that read The Economist. The US is getting gradually richer, and the average young adult is benefiting. You can see more from Jeremy by following him on Twitter/X.
- Civil War as radical literalism Mike Makowsky writes, “There’s a million war movies, most of which have arcs and metaphors strewn throughout. The problem with making a moving about a hypothetical civil war in the modern United States is that the audience will spend so much time looking for the heroes, villains, and associated opportunities to feel morally superior that it seems almost impossible to deliver an effective portrayal of what it might actually feel like to wake up to a US civil war…”
- Is “Rich Dad Poor Dad” a Fraud? Scott explores whether a popular finance book is based on a false premise.
- Is the Universe Legible to Intelligence? I (Joy) do philosophy. It also has practical implications. Can machines outsmart us, for better or worse? How smart can anything physical be. Maybe, as @sama says, “intelligence is an emergent property of matter…” However, maybe “intelligence” only goes so far. We have many posts on artificial intelligence this year.
- How To Drive a Turbocharged Car, Such as a Honda CR-V This is one of those pieces by Scott that people find through search engines when they are looking for help.
- Grocery Price Nostalgia: 1980 Edition You can use our search function to find everything from this year about the topic of inflation.
- The US Housing Market Is Very Quickly Becoming Unaffordable
- Predicting College Closures James reflects on closing universities and what indicators might help stakeholders like parents and faculty anticipate the next event.
- Counting Jobs (Revisited) Jeremy did something that might have sounded boring at the time. Yet, soon afterwards there was serious interest in the question of : Did 818,000 jobs vanish?
- Why Avocado on Toast? As an avocado toast person, I loved this. I’m glad many other people found Zachary’s post interesting.
- Recovering My Frozen Assets at BlockFi, Part1. How Sam Bankman-Fried’s Fraud Cost Me.
- Why Don’t Full Daycares Raise Prices? The cost of childcare is an important issue. James wrote this from personal experience, and I pointed out something similar before.
- This post only got medium traffic in terms of the number of views this summer. Now that we know who the candidate will be, it’s interesting to look back and see a vindication of betting markets. Who Will Be the Democratic Presidential Candidate? Follow the Money (Betting Markets)
- Honorable mention to Mike’s post from 2022 that continues to get many search hits: Why Agent-Based Modeling Never Happened in Economics
At this point, the EWED authors have each written enough words to constitute a book. Watching this blog grow and flux with the rest of the internet has been fascinating.
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Sticky Prices as Coordination Failure Working Paper
“Sticky Prices as Coordination Failure: An Experimental Investigation” is my new paper with David Munro of Middlebury, up at SSRN.
We ask whether coordination failures are a source of nominal rigidities. This was suggested in a recent speech by ECB President Christine Lagarde. She said, “In the recent decades of low inflation, firms that faced relative price increases often feared to raise prices and lose market share. But this changed during the pandemic as firms faced large, common shocks, which acted as an implicit coordination mechanism vis-à-vis their competitors.”
Coordination failure was suggested as a possible cause of price rigidity in a theory paper by Ball and Romer (1991). They demonstrated the possibility for multiple equilibria, and we perform the first laboratory test to observe equilibrium selection in this environment.
We theoretically solve a monopolistically competitive pricing game and show that a range of multiple equilibria emerges when there are price adjustment costs (menu costs). We explore equilibrium selection in laboratory price setting games with two treatments: one without menu costs where price adjustment is always an equilibrium, and one with menu costs where both rigidity and flexibility are possible equilibria.
In plain language, for our general audience, the idea is that the prices you set might depend on what other people are doing. If other people are responding to a shock (for example, Covid driving up labor costs all over town might cause retail prices to rise) then you will, too. If every other store in town is afraid to raise prices, then there is a certain situation where you might resist adjusting your prices, too (price rigidity).
Results: First, when there is only one theoretical equilibrium, subjects usually conform to it. When cost shocks are large, price adjustment is a unique equilibrium regardless of the presence of menu costs, and we see that subjects almost always adjust prices. When cost shocks are small and there are menu costs rigidity is a unique equilibrium and subjects almost never adjust. Conversely, with small cost shocks subjects almost always adjust when there are no menu costs.
The more interesting cases are when the parameters allow for either rigidity or flexibility to be selected. We find that groups do not settle at the rigidity equilibrium. Rather, depending on the specific nature of the shock, between half and 80% of subjects adjust in response to a shock. The intermediate levels of adjustment are represented here in this figure as the red circles that fall between the red and green bands where multiple equilibria are possible.
In the figure above, the red circles are higher when the production cost shock gets further from zero in absolute value. We see that the proportion of subjects adjusting prices is proportional to the size of the cost shocks. This is consistent with the interpretation that the large post-COVID cost shocks acted as an implicit coordination mechanism for firms raising prices. Our results provide a number of interesting insights on nominal rigidities. We document more nuance in the paper regarding heterogeneity and asymmetry. Comments and feedback are appreciated! If it’s not clear from the EWED blog how to email me (Joy), find my professional contact info here.
Publish or Perish: A Hilarious Card Game Based on Academia
I had the opportunity to play an advanced copy of “Publish or Perish,” a new card game that satirizes the world of academia. Created by Max Bai, this game offers a funny take on the often cutthroat world of academic publishing.
Official website for the game: here
My group of eight friends divided into teams to accommodate the game’s six-player limit, which I’d recommend not exceeding. From the moment we started reading the instructions aloud, we were laughing.
The gameplay is engaging. One unexpectedly hilarious rule involves clapping for each other’s achievements. The game’s core revolves around publishing manuscripts, accumulating citations, and navigating the waters of peer review and academic politics.
I was impressed by the calibration of the trivia questions. They struck a great balance – challenging enough that we often couldn’t answer them, yet not so obscure that they felt unreasonable. This aspect added an educational twist to the fun, sparking interesting discussions.
The humor in “Publish or Perish” is spot-on, especially in the details. The manuscript cards had us in stitches, with journal names like “Chronicle of Higher Walls” (a clever play on the real “Chronicle of Higher Education”) and absurd paper titles.
The two other full-time academics in our group were so impressed that they pre-ordered copies on the spot. While the game is probably most enjoyable with at least one academic in the group, our mixed party – including a government statistician and several non-academics – found it entertaining. One of my non-academic friends summed it up as follows: “This game brought several people from different backgrounds and areas of expertise together for a thoroughly enjoyable evening.”
“Publish or Perish” manages to be both easy to learn and refreshingly original. I predict it will carve out its own niche with its unique theme and mechanics. Players can engage in academic shenanigans like plagiarism, P-value hacking, and even sabotaging opponents’ work – all in good fun.
Continue readingCulture Parenting Chatter
I’ve been traveling. Here are some things I noticed (on the internet, not on my travels). (On my travels I learned that rental golf carts are as fun as they look.)
2. This is a poastmodern election. “Campaigners use the internet medium to dunk on their opponents instead of offer solutions to problems.”
“deeply online left wing instagram women are meeting, for the first time ever, deeply online right wing twitter guys. both have developed intricate, sacred language foreign to the other. both are waging war they thought already won. fyi in case you’re wondering about the meltdown”
I thought that meeting happened months ago with the “bear in the woods” discourse.
3. If it wasn’t so serious, American politics would be too funny for television.
4. This woman who gave up professional dancing and now has 8 kids.
One does wonder if the skills that get a person into Julliard relate to the ability to turn family into an Instagram sensation. Is this Ambitious Parenting?
“My day with the trad wife queen and what it taught me” This article about Ballerina Farm reads like the anti-“Hannah’s Children” (reviewed by my former student here)
Hannah Neeleman, the mom at Ballerina Farm, has told her story in what appears to be her own words here: https://ballerinafarm.com/pages/about-us Neeleman says that when she was living in Brazil, she would vacation at, “farms and ranches. A place where you could eat farm fresh cheeses and meats, learn about animals, watch chores being done, etc. We were hooked.” I’m tempted to say that it’s weird to say she was into watching other people do chores. But maybe the word “weird” just has lost all meaning after this week.
Jeremiah Johnson points out that, “It doesn’t matter that their farm isn’t a very productive farm, because the husband’s family founded JetBlue.” My take is that these are rich people who are taking a reality-show approach to their lives like wholesome Kardashians. The Neelemans are into watching people do farm chores. (Yes, they do chores themselves, too, but clearly a large professional staff runs the place.) Good for them. As I said at the beginning, I’m into renting golf carts now.
Sources on AI use of Information
Abstract: General-purpose artificial intelligence (AI) systems are built on massive swathes of public web data, assembled into corpora such as C4, Refined Web, and Dolma. To our knowledge, we conduct the first, large-scale, longitudinal audit of the consent protocols for the web domains underlying AI training corpora. Our audit of 14, 000 web domains provides an expansive view of crawlable web data and how consent preferences to use it are changing over time. We observe a proliferation of AI specific clauses to limit use, acute differences in restrictions on AI developers, as well as general inconsistencies between websites’ expressed intentions in their Terms of Service and their robots.txt. We diagnose these as symptoms of ineffective web protocols, not designed to cope with the widespread re-purposing of the internet for AI. Our longitudinal analyses show that in a single year (2023-2024) there has been a rapid crescendo of data restrictions from web sources, rendering ~5%+ of all tokens in C4, or 28%+ of the most actively maintained, critical sources in C4, fully restricted from use. For Terms of Service crawling restrictions, a full 45% of C4 is now restricted. If respected or enforced, these restrictions are rapidly biasing the diversity, freshness, and scaling laws for general-purpose AI systems. We hope to illustrate the emerging crisis in data consent, foreclosing much of the open web, not only for commercial AI, but non-commercial AI and academic purposes.
AI is taking out of a commons information that was provisioned under a different set of rules and technology. See discussion on Y Combinator
2. “ChatGPT-maker braces for fight with New York Times and authors on ‘fair use’ of copyrighted works” (AP, January ’24)
3. Partly handy as a collection of references: “HOW GENERATIVE AI TURNS COPYRIGHT UPSIDE DOWN” by a law professor. “While courts are litigating many copyright issues involving generative AI, from who owns AI-generated works to the fair use of training to infringement by AI outputs, the most fundamental changes generative AI will bring to copyright law don’t fit in any of those categories…”
4. New gated NBER paper by Josh Gans “examines this issue from an economics perspective”
Joy: AI companies have money. Could we be headed toward a world where OpenAI has some paid writers on staff? Replenishing the commons is relatively cheap if done strategically, in relation to the money being raised for AI companies. Jeff Bezos bought the Washington Post. It cost a fraction of his tech fortune (about $250 million). Elon Musk bought Twitter. Sam Altman is rich enough to help keep the NYT churning out articles. Because there are several competing commercial models, however, the owners of LLM products face a commons problem. If Altman pays the NYT to keep operating, then Anthropic gets the benefit, too. Arguably, good writing is already under-provisioned, even aside from LLMs.
See New York City for Cheap
Two years ago, when we still had a preschooler, I wrote “See New York City for Free.” In the spirit of Do Less for Preschool, we did not actually go into the city. We looked at the Manhattan skyline from Liberty State Park in New Jersey (free parking). The park has points of interest. I do not believe my kids would have benefitted from an expensive trip into NYC, in 2022 (which isn’t to say that parents should rule it out if they are primarily going for themselves). Remember that a 4-year-old enjoys poking a bucket of rain water about as much as a trip to Disneyworld. Sticking to the nap schedule is probably better for everyone than doing a forced march through fancy landmarks in any weather, for preschool kids.
Now in 2024, we have graduated to actually going into the city (for now, assume the constraint of spending our nights in New Jersey, you guys). I’ll describe two low-budget day trips that will tire but not exhaust school-age kids.
On the first day, we used NJ Transit trains to get to New York Penn Station. Since my kids do mostly cars and suburbs, the train itself was fun. On weekends and holidays, kids ride free on NJ Transit. From there, we walked all the way to Central Park, which took us through Time Square. You call this “urban hiking” now (previously known as walking). We stopped into a few stores along the way. I’ve taught my kids to “window shop” in a store, meaning they are warned ahead of time that we are not buying anything. We spent money on food and drinks, but it would have been possible to pack in a lot more food if desired. Once we had walked all the way to the upper east side (about 3 miles), we took a taxi back to the train station.
On the second day, we avoided high parking fees once again by departing on the ferry from the New Jersey terminal to see the Statue of Liberty. There were plenty of families with preschool kids or babies, by the way. Strollers are allowed on the ferries, just not inside the pedestal or statue. The ferry ticket includes access to all of the indoor museums and audio tours. If you want to be allowed to walk up the stairs into the crown of the statue, be aware that you need to book those tickets many months in advance. If you just want to take the ferry to the island, then you don’t have to plan so far ahead.
These plans rely heavily on being outside, so rain would pose a problem. There are plenty of places to escape the rain, but it would not be nearly as fun/cheap.
If you are road tripping anywhere with kids, read Zach on long family car trips. I’ll add that you can fill up a large insulated thermos of ice from the hotel and bring it along to provision drinks from cans throughout the day.
Pictured: Central Park, view from Statue of the Statue, view from the Statue of the city
Oster on Haidt and Screens
Emily Oster took on the Jonathan Haidt-related debate in her latest post “Screens & Social Media“
Do screens harm mental health? Oster joins some other skeptics I know. She doesn’t fully back Haidt, and she does the economist thing by mentioning “tradeoffs.”
Oster, ever practical, makes a point that sometimes gets lost. Maybe social media doesn’t cause suicide. Maybe there is no causal relationship concerning diagnosed mental health conditions, as indicated by the data. That doesn’t mean that parents and teachers should not monitor and curtail screen time. Oster says that it’s obvious that kids should not have their phones in the classroom during school instruction.
Here’s a personal story from this week. My son wants Roblox. The game says 12+, and I’ve told him that I’m sticking to that. No. He can’t have it now and he can’t start chatting with strangers online. We aren’t going to re-visit the conversation until he’s 12. Is he mad at me? Yes. You know what he does when he’s really bored at home? He starts vacuuming. I’ve driven him to madness, with these boundaries I set, or to vacuuming. (Recall he likes these books. Since hearing Harry Potter 1 as an audiobook in the car, he’s started tearing through the series himself via hardcover book.)
An innocent tablet game I let him play (when he’s allowed to have screen time) is Duck Life. Rated E for everyone.
Previously, I wrote “Video Games: Emily Oster, Are the kids alright?“
And more recently, Tyler had “My contentious Conversation with Jonathan Haidt” Maybe Tyler should debate Emily Oster next about limiting phone use.
Meme Generator for Econ Papers
I’m exploring whether the meme generator by Glif could be a way to introduce an econ paper. What if you identify a main character in your research project for GLIF to drag? (BTW, I have learned that the Wojack Meme Generator will re-write the name of the person you put in if your phrase is too long but that does not mean that the phrase is not used for content. So, you can put a longer phrase into the meme generator.)
I’m going to re-print here the prompt I actually used to get the Glif meme. As a warning, this approach is obviously not appropriate for more professional audiences. But sometimes you have a chance to quickly show your paper to a more informal audience either in a presentation or online. Having a way to wake up the audience in that situation could be helpful.
I’m not sharing all of these because I like them. I’m trying to give readers a chance to decide if they’d want to try it themselves. I think some of these prompts don’t work well and the cartoons either aren’t funny or are not true to life. However, I do find them interesting if the assignment is to scrape the internet for the maximally negative sentiment about a certain thing.
The prompt I used: “Pay Transparency Advocate” / “Effort Transparency and Fairness,” with Elif Demiral and Umit Saglam (under review)
Prompt: “Person Who Trusts ChatGPT” / “Do People Trust Humans More Than ChatGPT?” (2024) with William Hickman. Journal of Behavioral and Experimental Economics, 112: 102239.
Prompt: “Undergraduate Computer Science Major” / “Willingness to be Paid: Who Trains for Tech Jobs?” (2022) Labour Economics, Vol 79, 102267.
GLIF Social Media Memes
Wojak Meme Generator from Glif will build you a funny meme from a short phrase or single word prompt. Note that it is built to be derogatory, cruel for sport, and may hallucinate up falsehoods. (see tweet announcement)
I am fascinated by this from the angle of modern anthropology. The AI has learned all of this by studying what we write online. Someone can build an AI to make jokes and call out hypocrisy.
Here are GLIFs of the different social media user stereotypes as of 2024. Most of our current readers probably don’t need any captions to these memes, but I’ll provide a bit of sincere explanation to help everyone understand the jokes.
Twitter user: Person who posts short messages and follows others on the microblogging platform.
Facebook user: Individual with a profile on the social network for connecting with friends and sharing content.
Bluesky user: Early adopter of a decentralized social media platform focused on user control.
Economist Writing Every Day 