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. 

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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.

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Market Preserving Federalism in the USA

One of my favorite economic journal articles is by Barry Weingast and has the short title “Market Preserving Federalism” (MPF). In this paper, Weingast lays out the conditions necessary for two tenuous equilibria: A) Federalism  & B) Federalism that preserves a market economy.  Given that we just celebrated Independence Day in the USA, it seems to me like a good opportunity to share some brief thoughts on this paper. I’ll speak in terms of the US for ease.

Weingast enumerates 5 features for MPF, starting with two that characterize a stable federalism:

F1) A hierarchy of governments, that is, at least “two levels of governments rule the same land and people,” each with a delineated scope of authority so that each level of government is autonomous in its own, well-defined sphere of political authority

F2) The autonomy of each government is institutionalized in a manner that makes federalism’s restrictions self-enforcing

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Goodbye, Chevron

Last Friday the Supreme Court overturned the doctrine of Chevron deference as part of its ruling in Loper Bright Enterprises v Raimondo. This might not have even been their most discussed ruling of the past week, but in my (non-lawyerly) opinion, there is a good chance it will be their most economically impactful ruling of the past decade. SCOTUSblog explains the basics:

the Supreme Court on Friday cut back sharply on the power of federal agencies to interpret the laws they administer and ruled that courts should rely on their own interpretation of ambiguous laws. The decision will likely have far-reaching effects across the country, from environmental regulation to healthcare costs.

By a vote of 6-3, the justices overruled their landmark 1984 decision in Chevron v. Natural Resources Defense Council, which gave rise to the doctrine known as the Chevron doctrine. Under that doctrine, if Congress has not directly addressed the question at the center of a dispute, a court was required to uphold the agency’s interpretation of the statute as long as it was reasonable. But in a 35-page ruling by Chief Justice John Roberts, the justices rejected that doctrine, calling it “fundamentally misguided.”

Justice Elena Kagan dissented, in an opinion joined by Justices Sonia Sotomayor and Ketanji Brown Jackson. Kagan predicted that Friday’s ruling “will cause a massive shock to the legal system.”

When the Supreme Court first issued its decision in the Chevron case more than 40 years ago, the decision was not necessarily regarded as a particularly consequential one. But in the years since then, it became one of the most important rulings on federal administrative law, cited by federal courts more than 18,000 times.

The most common reaction I’ve seen is that people expect this to reduce the power of executive branch agencies, both in general and relative to courts and businesses, likely resulting in deregulation. Thus those on the economic left have been mostly decrying the decisions, while free–marketers and businesspeople have mostly been celebrating:

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Who Will Be the Democratic Presidential Candidate? Follow the Money (Betting Markets)

Back in January I encouraged you to follow the money in the Presidential race, by which I meant follow the betting markets. I suggested this was a good way to cut through the sometimes inaccuracy of polls, and the uncertainty of listening to any one expert or group of experts. Bettors in prediction markets can take all of these into account.

Lately of course the big question in the Presidential race is whether Biden will actually be the Democratic nominee. There is much uncertainty right now, and you will all kinds of predictions from experts, media quoting “inside sources,” and other such rumors. How are you, as a relatively uninformed outsider, supposed to know who to trust?

The answer again I will suggest is: watch the betting markets. And if you check the betting markets today (aggregated across multiple markets by EletionBettingOdds.com), you will see that Biden and Kamala Harris have roughly equal chances of becoming the next President (and Trump is about a 60% favorite):

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How Repurposing Graphic Processing Chips Made Nvidia the Most Valuable Company on Earth

Folks who follow the stock market know that the average company in the S&P 500 has gone essentially nowhere in the last couple of years. What has pulled the averages higher and higher has been the outstanding performance of a handful of big tech stocks. Foremost among these is Nvidia. Its share price has tripled in the past year, after nearly tripling in the previously twelve months. Its market value climbed to $3.3 trillion last week, briefly surpassing tech behemoths Microsoft and Apple as the most valuable company in the world.

What just happened here?

It all began in 1993 when Taiwanese-American electrical engineer Jensen Huang and two other Silicon Valley techies met in a Denny’s in East San Jose and decided to start their own company. Their focus was making graphics acceleration boards for video games. Computing devices such as computers, game stations, and smart phones have at their core a central processing unit, CPU. A strength of CPUs is their versatility. They can do a lot of different tasks, but sequentially and thus at a limited speed.  To oversimplify, a CPU fetches an instruction (command), and then loads maybe two chunks of data, then performs the instructed calculations on those data, and then stores the result somewhere else, and then turns around and fetches the next instruction. With clever programming, some tasks can be broken up into multiple pieces that can be processed in parallel on several CPU cores at once, but that only goes so far.

Processing large amounts of graphics data, such as rendering a high-resolution active video game, requires an enormous amount of computing. However, these calculations are largely all the same type, so a versatile processing chip like a CPU is not required. Graphics processing units (GPUs), originally termed graphics accelerators, are designed to do enormous number of these simple calculations simultaneously. To offload the burden on the CPU, computers and game stations for decades have included on auxiliary GPU (“graphics card”) alongside the CPU.

This was the original target for Nvidia. Video gaming was expanding rapidly, and they saw a niche for innovative graphics processors. Unfortunately, they the processing architecture they choose to work on fell out of favor, and they skated right up to the edge of going bankrupt. In 1993 Nvidia was down to 30 days before closing their doors, but at the last moment they got a $5 million loan to keep them afloat. Nvidia clawed its way back from the brink and managed to make and sell a series of popular graphics processors.

However, management had a vision that the massively parallel processing power of their chips could be applied to more exulted uses than rendering blood spatters in Call of Duty.  The types of matrix calculations done in GPUs can be used in a wide variety of physical simulations such as seismology and molecular dynamics. In 2007, and video released its CUDA platform for using GPUs for accelerated general purpose processing. Since then, Nvidia has promoting the use of its GPUs as general hardware for scientific computing, in addition to the classic graphics applications.

This line of business exploded starting around 2019, with the bitcoin craze. Crypto currencies require enormous amount of computing power, and these types of calculations are amenable to being performed in massively parallel GPUs. Serious bitcoin mining companies set up racks of processors, built on NVIDIA GPUs. GPUs did have serious competition from other types of processors for the crypto mining applications, so they did not have the field to themselves. With people stuck at home in 2020-2021, demand for GPUs rose even further: more folks sitting on couches playing video games, and more cloud computing for remote work.

Nvidia Dominates AI Computing

Now the whole world cannot get enough of machine learning and generative AI. And Nvidia chips totally dominate that market. Nvidia supplies not only the hardware (chips) but also a software platform to allow programmers to make use of the chips. With so many programmers and applications standardized now on the Nvidia platform, its dominance and profitability should persist for many years.

Nearly all their chips are manufactured in Taiwan, so that provides a geopolitical risk, not only for Nvidia but for all enterprises that depend on high end AI processing.

The President as Authoritarian

As maybe the least libertarian economist on this blog roll, its interesting that the timing of today’s Supreme Court Decision falls on my watch. The best thing to read is probably Sotamayor’s dissent which lays it out plainly: the President is, by today’s ruling, clear to use their power with almost complete immunity from criminal prosecution. It feels like hyperbole, but this is really dark stuff. The kind of thing I didn’t think I would ever see in my lifetime. I know many are framing this in terms of Trump and his current slate of legal cases, but those costs are comparatively trivial relative to the costs going forward.

How did we get here? It’s tempting to trace back a conspiratorial timeline, but I think the answer is far more banal. It only takes the appointment of a few incompetent careerists to undermine the collective wisdom of a nine person voting body and here we are:

I’m not sure what else to write that isn’t already plainly stated by far more qualified legal observers. This isn’t great.

Is the Universe Legible to Intelligence?

I borrowed the following from the posted transcript. Bold emphasis added by me. This starts at about minute 36 of the podcast “Tyler Cowen – Hayek, Keynes, & Smith on AI, Animal Spirits, Anarchy, & Growth” with Dwarkesh Patel from January 2024.

Patel: We are talking about GPT-5 level models. What do you think will happen with GPT-6, GPT-7? Do you still think of it like having a bunch of RAs (research assistants) or does it seem like a different thing at some point?

Cowen: I’m not sure what those numbers going up mean or what a GPT-7 would look like or how much smarter it could get. I think people make too many assumptions there. It could be the real advantages are integrating it into workflows by things that are not better GPTs at all. And once you get to GPT, say 5.5, I’m not sure you can just turn up the dial on smarts and have it, for example, integrate general relativity and quantum mechanics.

Patel: Why not?

Cowen: I don’t think that’s how intelligence works. And this is a Hayekian point. And some of these problems, there just may be no answer. Like maybe the universe isn’t that legible. And if it’s not that legible, the GPT-11 doesn’t really make sense as a creature or whatever.

Patel (37:43) : Isn’t there a Hayekian argument to be made that, listen, you can have billions of copies of these things. Imagine the sort of decentralized order that could result, the amount of decentralized tacit knowledge that billions of copies talking to each other could have. That in and of itself is an argument to be made about the whole thing as an emergent order will be much more powerful than we’re anticipating.

Cowen: Well, I think it will be highly productive. What tacit knowledge means with AIs, I don’t think we understand yet. Is it by definition all non-tacit or does the fact that how GPT-4 works is not legible to us or even its creators so much? Does that mean it’s possessing of tacit knowledge or is it not knowledge? None of those categories are well thought out …

It might be significant that LLMs are no longer legible to their human creators. More significantly, the universe might not be legible to intelligence, at least of the kind that is trained on human writing. I (Joy) gathered a few more notes for myself.

A co-EV-winner has commented on this at Don’t Worry About the Vase

(37:00) Tyler expresses skepticism that GPT-N can scale up its intelligence that far, that beyond 5.5 maybe integration with other systems matters more, and says ‘maybe the universe is not that legible.’ I essentially read this as Tyler engaging in superintelligence denialism, consistent with his idea that humans with very high intelligence are themselves overrated, and saying that there is no meaningful sense in which intelligence can much exceed generally smart human level other than perhaps literal clock speed.

I (Joy) took it more literally. I don’t see “superintelligence denialism.” I took it to mean that the universe is not legible to our brand of intelligence.

There is one other comment I found in response to a short clip posted by @DwarkeshPatel  by youtuber @trucid2

Intelligence isn’t sufficient to solve this problem, but isn’t for the reason he stated. We know that GR and QM are inconsistent–it’s in the math. But the universe has no trouble deciding how to behave. It is consistent. That means a consistent theory that combines both is possible. The reason intelligence alone isn’t enough is that we’re missing data. There may be an infinite number of ways to combine QM and GR. Which is the correct one? You need data for that.

I saved myself a little time by writing the following with ChatGPT. If the GPT got something wrong in here, I’m not qualified to notice:

Newtonian physics gave an impression of a predictable, clockwork universe, leading many to believe that deeper exploration with more powerful microscopes would reveal even greater predictability. Contrary to this expectation, the advent of quantum mechanics revealed a bizarre, unpredictable micro-world. The more we learned, the stranger and less intuitive the universe became. This shift highlighted the limits of classical physics and the necessity of new theories to explain the fundamental nature of reality.
General Relativity (GR) and Quantum Mechanics (QM) are inconsistent because they describe the universe in fundamentally different ways and are based on different underlying principles. GR, formulated by Einstein, describes gravity as the curvature of spacetime caused by mass and energy, providing a deterministic framework for understanding large-scale phenomena like the motion of planets and the structure of galaxies. In contrast, QM governs the behavior of particles at the smallest scales, where probabilities and wave-particle duality dominate, and uncertainty is intrinsic.

The inconsistencies arise because:

  1. Mathematical Frameworks: GR is a classical field theory expressed through smooth, continuous spacetime, while QM relies on discrete probabilities and quantized fields. Integrating the continuous nature of GR with the discrete, probabilistic framework of QM has proven mathematically challenging.
  2. Singularities and Infinities: When applied to extreme conditions like black holes or the Big Bang, GR predicts singularities where physical quantities become infinite, which QM cannot handle. Conversely, when trying to apply quantum principles to gravity, the calculations often lead to non-renormalizable infinities, meaning they cannot be easily tamed or made sense of.
  3. Scales and Forces: GR works exceptionally well on macroscopic scales and with strong gravitational fields, while QM accurately describes subatomic scales and the other three fundamental forces (electromagnetic, weak nuclear, and strong nuclear). Merging these scales and forces into a coherent theory that works universally remains an unresolved problem.

Ultimately, the inconsistency suggests that a more fundamental theory, potentially a theory of quantum gravity like string theory or loop quantum gravity, is needed to reconcile the two frameworks.

P.S. I published “AI Doesn’t Mimic God’s Intelligence” at The Gospel Coalition. For now, at least, there is some higher plane of knowledge that we humans are not on. Will AI get there? Take us there? We don’t know.

Do I Trust Claude 3.5 Sonnet?

For the first time this week, I paid for a subscription to an LLM. I know economists who have been on the paid tier of OpenAI’s ChatGPT since 2023, using it for both research and teaching tasks.

I did publish a paper on the mistakes it makes: ChatGPT Hallucinates Nonexistent Citations: Evidence from Economics In a behavioral paper, I used it as a stand-in for AI: Do People Trust Humans More Than ChatGPT?

I have nothing against ChatGPT. For various reasons, I never paid for it, even though I used it occasionally for routine work or for writing drafts. Perhaps if I were on the paid tier of something else already, I would have resisted paying for Claude.  

Yesterday, I made an account with Claude to try it out for free. Claude and I started working together on a paper I’m revising. Claude was doing excellent work and then I ran out of free credits. I want to finish the revision this week, so I decided to start paying $20/month.

Here’s a little snapshot of our conversation. Claude is writing R code which I run in RStudio to update graphs in my paper.

This coding work is something I used to do myself (with internet searches for help). Have I been 10x-ed? Maybe I’ve been 2x-ed.

I’ll refer to Zuckerberg via Dwarkesh (which I’ve blogged about before):

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Not Just Consumer Prices

We all know about inflation. One popular measure is the Consumer Price Index (CPI), which measures the change in price of a fixed basket of goods. The other popular measure used for inflation is the Personal Consumption Expenditures (PCE) price index. This index measures the price of what consumers actually purchase and captures the effects of consumers changing their consumption bundles over time. While the latter is a better measure for the prices at which consumers make purchases, it takes longer to calculate. In practice, the earlier CPI release gives a pretty accurate preview to the PCE price index.

While consumption is a substantial two-thirds of total expenditures in the US economy, other prices definitely matter. On average, a third of our income is spent on other things. Below is a stacked bar chart of quarterly GDP components – the classic Y=C+I+G+NX.* Investment spending composes a relatively stable 16.7% and Government spending composes about 16.5% of GDP. We almost never hear much about the price of these other things.

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